INCOME TAX ACT, 1961

Section 271AAA

Penalty under section 271AAA - Leviability - Penalty notice not mentioning particular limb of Explanation to section 271AAA -

AO pursuant to search conducted in assessee's case made addition on account of undisclosed expenditure on purchase of ladies watches and accordingly, levied penalty under section 271AAA. Assessee challenged this on the ground penalty noticed though mentioned section 271AAA, but it notice did not mention particular limb of Explanation to section 271AAA defining 'undisclosed income' for which penalty was proposed to be levied. Held: A perusal of the notice issued under section 274 read with section 271AAA showed that same was a printed format without striking of the inappropriate words of the same. A perusal of notice issued under section 274 read with section 271AAA showed that such notice did not mention particular limb of Explanation to section 271AAA defining 'undisclosed income for which penalty was proposed to be levied. Rather such notice reproduced language under the scope of section 271(1)(c) and not section 271AAA. Therefore, such notice was vague and had to be treated as invalid. Since this notice clearly showed non-application of mind on part of AO. As there was no specific ground on which penalty proceedings is initiated, therefore, penalty so levied by AO was cancelled.

Followed:CIT v. Manjunath Cotton and Ginning Factory (2014) 359 ITR 565 (Karn) : 2014 TaxPub(DT) 0202 (Karn-HC) and CIT v. SSA's Emerald Meadows (2018) 73 taxman.com 241 (Karn) : 2018 TaxPub(DT) 0953 (Karn-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2012-13

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