UMMAID MAL SINGHVI,JODHPUR vs. ACIT, CENTRAL CIRCLE-2, JODHPUR

ORDER

PER DR. DIPAK P. RIPOTE, AM:

“1] That on the facts and in the circumstances of the case, the order passed by Id. A.O. imposing penalty u/s 271AAA for 4,06,620/- is bad in law and bad in facts. 2] That on the facts and in the circumstances of the case, the Id. A.O. erred in imposing penalty u/s 271AAA without recording any finding on the objection of the assessee that no valid search was conducted against the assessee. The fact recorded in the penalty order that the Hon'ble Tribunal uphold the validity of search against the assessee is not a correct fact as on merits the tribunal did not deal with the issue as the ground of appeal was not pressed by the assessee at the time of hearing of appeal. Further the penalty proceeding are independent proceeding and the legality of the assessment can be challenged at any stage. 3] That on the facts and in the circumstances of the case, the ld. A.O. erred in imposing penalty u/s 271AAA on the undisclosed income of 28,54,307/- as: a) The finding recorded by the Ld. AO that the assessee declared a loss of 12,87,327 vide return u/s 139(1) dated 30/09/2008 is perverse and without verification of the records. The original return of income was filed on 31/07/2008 vide acknowledgement no 38031599 showing total income of 12,87,3271- therefore the imposition of penalty on 2574654/- ( 12,87,327/-+12,87,327/-) is patently erroneous and speaks about arbitrary approach of the Ld. AO in the matter of imposition of penalty. 4] Without prejudice to above and in the alternative: a) That as per provisions of sub section (2) of section 271AAA, no penalty is imposable under sub section (1) if the assessee disclosed the income and pay taxes with interest on the same. b) That the immunity from the penalty as per provisions of sub section (2) cannot be taken away merely because the income was declared over and above then disclosed in the return filed u/s 139(1). 5] That on the facts and in the circumstances of the case, the ld. A.O. erred in imposing penalty u/s 271AAA on 1,42,000/- being addition in long term capital gain declared by the assessee by invoking the provisions of section 50C. The imposition of penalty on addition of 1,42,000/- is erroneous as: a) The finding recorded by the Ld. AO that the Hon'ble Tribunal confirmed the addition of 142000/- is patently erroneous as the Hon'ble Tribunal only confirmed the direction of the Ld. CIT(A) in making reference u/s 50C in respect of land actually transferred by registered sale deed. b) The addition of 1,42,000/- computed on the basis of valuation report obtained as per direction of worthy CIT(A) is erroneous as no order giving effect to the order of Hon'ble Tribunal or revising the order giving appeal effect of order of worthy CIT(A). Thus the imposition of penalty without making the addition in the income is erroneous and without authority of law. c) That penalty u/s 271AAA can be imposed on the undisclosed income and the term undisclosed income for the purpose of section 271AAA is defined in explanation to section 271AAA. As per the provision and the explanation no penalty can imposed on the addition on the basis of deeming provisions of section 50C.

6] Without prejudice to above and in the alternative; a) The valuation of the land on the basis of DLC rates adopted by the registering authority is itself erroneous and defeats the vary purpose of the reference to the valuation officer as the valuation was referred to the valuation officer to determine the fair market value of the land on submission of the assessee that the value adopted by the stamp valuation authority exceeds the fair market value of the property. b) The valuation of the land by the valuation officer is without considering the objections of assessee and is based on incorrect facts by treating the land in question as irrigated land, particularly when the land was totally un-irrigated.

7] That on the facts and in the circumstances of the case, the Ld. AO erred in imposing penalty on the addition sustained on account of gold and silver ornaments without considering the bonafide explanation about the nature and source of acquisition of Gold and Silver ornaments.

8] That the petitioner may kindly be permitted to raise any additional or alternative ground at or before the time of hearing. 9] The petitioner prays for justice & relief.

Basic Facts 2. In this case, there was a search under section 132 of the Act on 25.03.2008. The Assessing Officer passed an assessment order under section 143(3) r.w.s. 153A of the Act. The Assessing Officer initiated penalty proceedings under section 271AAA for concealing the particulars of income. The Assessing Officer levied penalty under section 271AAA after giving opportunity to the assessee vide order dated 31.08.2012. Submission of Ld. AR 3. At the outset, learned AR raised a legal issue that the notice under section 271AAA issued by the Assessing Officer is invalid as it is not in the proper format. The learned AR submitted copy of the notice under section 271AAA dated 21.12.2009 and explained that the Assessing Officer has merely erased under section 271(1)(c) and wrote 271AAA in the notice. Learned AR, therefore, pleaded that this notice is not valid notice. The learned AR also submitted that assessee had raised this issue before learned CIT(A) however, Ld. CIT(A) has not adjudicated on this issue. Submission of Ld. DR 4. The learned DR relied on the order of Ld. CIT(A) and AO. The Ld. DR also stated that assessee has not raised this before Ld. CIT(A). Ld. DR also submitted that the format of notice under section 271AAA is ITNS i.e. Income Tax Non Statutory format. Therefore, Ld. DR stated that there is no specified format for the notice and AO can issue the notice in the format which AO has done.

in Form No. 35 filed before the Ld. CIT(A) is as under:-

1. That on the facts and in the circumstances of the case, the order passed by Ld. A.O. imposing penalty u/s 271AAA for Rs. 4,06,620/- is bad in law and bad in facts.”