RAJESH KUMAR AGARWAL,SADULSHAHAR vs. ITO, SRIGANGANAGAR

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ITA 467/JODH/2024Status: DisposedITAT Jodhpur07 August 2026AY 2015-165 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since no variation was made to the declared income, there was no concealment or furnishing of inaccurate particulars. Furthermore, the penalty order was vitiated by a non-application of mind as the show cause notice did not specify the exact limb under Section 271(1)(c) for which penalty was being imposed.

What were the facts?

During a survey, the assessee offered additional income of Rs. 15,00,000/- which was included in the return. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for furnishing inaccurate particulars, even without varying the declared income. The penalty was confirmed by the CIT(A).

What were the issues?

Whether penalty under Section 271(1)(c) can be imposed when no variation is made to the declared income and whether a vague show cause notice renders the penalty proceedings invalid.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 133A,Section 115BBE,Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, JODHPUR BENCH, JODHPUR

For Appellant: Shri T.C/ Gupta, Advocate (Virtual)
For Respondent: Ms. Nidhi Nair, Addl. CIT-DR (Physical)

IN THE INCOME TAX APPELLATE TRIBUNAL JODHPUR BENCH, JODHPUR BEFORE SHRI SAKTIJIT DEY, HON’BLE VICE PRESIDENT AND SHRI MAKARAND VASANT MAHADEOKAR, HON’BLE ACCOUNTANT MEMBER ITA No. 467/Jodh/2024 (Assessment Year – 2015-16) Rajesh Kumar Agarwal Income Tax Officer Agarwal Flour Mill, Sriganganagar Sadulshahar-335062 PAN No. AEBPA 8291 A Assessee by Shri T.C/ Gupta, Advocate (Virtual) Revenue by Ms. Nidhi Nair, Addl. CIT-DR (Physical) Date of Hearing 05 / 08 / 2026. Date of Pronouncement 07 / 08 / 2026. ORDER PER: SHRI SAKTIJIT DEY, V.P.: This is an appeal by the assessee against order dated 14.05.2024 of Ld. Commissioner of Income Tax (Appeals), Jaipur confirming penalty imposed u/s 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2015-16.

2.

Briefly the facts are the assessee is a resident individual. For the assessment year under dispute assessee filed its return of income on 22.09.2015 declaring income of Rs. 18,52,810/-. Based on a survey conducted u/s 133A of the Act, in case of the assessee assessment proceedings were initiated. In course of assessment proceeding, the Assessing Officer found that during the survey

2 ITA No. 467/Jodh/2024 Asst. Year: 2015-16 operation, the assesse had offered additional income of Rs. 15,00,000/- to cover up the discrepancies found at the time of survey and the same additional income formed part of the return of income filed by the assessee. Though, the Assessing Officer did not make any variation to the income declared by the assessee, however, he stated that the assessee had furnished inaccurate particulars of income as the additional income was offered as a result of survey. Accordingly, he initiated proceedings for imposition of penalty u/s 271(1)(c) of the Act alleging furnishing of inaccurate particulars of income. Ultimately, an order was passed imposing penalty of Rs. 71,240/- by adopting the tax computed applying the enhanced rate u/s 115BBE of the Act. The penalty so imposed was confirmed by Ld. First Appellate Authority.

3.

Before us Ld. Counsel appearing for the assessee drew attention to the show cause notice issued u/s 2744 r.w.s. 271(1)(c) of the Act and submitted that the penalty imposed suffers from jurisdictional error and non-application of mind as the Assessing Officer has not specified the exact limb on which the penalty u/s 271(1)(c) of the Act was imposed. Thus, he submitted for this reason alone the penalty order has to be quashed. Without prejudice, he submitted that the provisions contained u/s 115BBE are applicable prospectively for assessment year

3 ITA No. 467/Jodh/2024 Asst. Year: 2015-16 2018-19. Hence, penalty imposed by computing the tax at the enhanced rate applicable u/s 115BBE is illegal.

4.

Ld. Departmental Representative relied upon the observations of the Assessing Officer and First Appellate Authority.

5.

We have considered rival submissions and perused materials on record. Undisputedly, in course of survey operation u/s 133A of the Act, the assessee offered additional income of Rs. 15,00,000/- which formed part of the return of income filed by the assessee. It is a fact that the Assessing Officer has not made any variation to the income declared in the return of income. Therefore, there cannot be any concealment or furnishing of inaccurate particulars of income with reference to the return of income. In so far as the reasoning of the Assessing Officer that since the assessee in course of survey has offered additional income of Rs. 15,00,000/- which is in the nature of undisclosed income, hence, has to be taxed at the enhanced rate provided u/s 115BBE of the Act and not at the rate of 30%, in our view the issue of applicability of Section 115BBE has to be decided in favour of the assessee as the provision would apply prospectively with effect from assessment year 2018-19. In so far as the validity of the penalty order for non- mentioning of specific limb in the show cause notice, it is observed, in the

4 ITA No. 467/Jodh/2024 Asst. Year: 2015-16 assessment order, the Assessing Officer has recorded his satisfaction that penalty proceedings are initiated for furnishing inaccurate particulars of income, However, in the show cause notice issued u/s 274 r.w.s. 271(1)(c) of the Act, a copy of which is placed on record, the Assessing Officer has not specified the exact limb for which he intended to impose penalty. Thus, due to such non- specification, there is failure of proper application of mind by the Assessing Officer which makes the penalty proceeding vulnerable. Thus, for the aforestated reasons, we are inclined to delete the penalty imposed u/s 271(1)(c) of the Act.

6.

In the result, appeal is allowed.

Order pronounced in the open court on 07/08/2026.

Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE PRESIDENT Dated : 07/08/2026. Nimisha, Sr. PS True Copy Copies to : (1) The appellant. (2) The respondent.

5 ITA No. 467/Jodh/2024 Asst. Year: 2015-16 (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File BY ORDER,

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