M/S. PAN REALTORS PVT. LTD.,NEW DELHI vs. DCIT, NEW DELHI

ORDER PER BEENA A PILLAI, JUDICIAL MEMBER Present appeal has been filed by assessee against order of Ld.CIT(Appeals)-XXVI, New Delhi dated 27.02.2015 for A.Y 2012- 13 on the following grounds of appeal: “1. The notice u/s 271AAA in general terms without specifying default (q or r) as issued is improper and is not in accordance with the requirements of law so as to enable the A.O. to continue valid penalty proceedings and any such consequent order is, therefore, bad in law.

2. The Ld. Assessing Officer has erred on facts and in law in initiating penalty proceedings u/s 271AAA and as such the consequent order is contrary to law, facts and material on record.

3. The Ld. Assessing Officer has erred on facts and in law in imposing penalty of Rs.50 lakhs on the amount offered in the return of income and accepted without dispute.

4. The appellant denies liability to penalty of Rs.50 lakhs as determined and computed by the Ld.AO and the manner in which A.Y.:2012-13 PAN Realtors P Ltd. it has been so determined or so computed without determining any undisclosed income in the assessment order.”

2. Brief facts of the case are as under: Assessee filed its return of income on 29/09/12 declaring total income of Rs.13,17,38,210/-. A search and seizure action was carried out at business and residential premises of Nirala Group of Companies along with that of assessee. The case was transferred to Central Circle 3, and notice under section 143 (2)/142 (1) was issued to assessee. 2.1. Assessee was called upon to furnish return of income in response to which assessee filed return of income as the original return of income. Ld.AO observed that assessee had shown business income from construction of houses, flats, buildings farmhouses, commercial centres etc. Various details were called for and case was discussed with Representative. 2.2. Further, assessee declared an additional business income of Rs. 10 crores for Financial Year 2010-11 and 2011-12 by Sh. Sudesh Kumar Garg, main person of the group and Director of assessee before Investigation Wing. Ld.AO initiated and levied 10% penalty under section 271 AAA of the of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’), as assessee did not explain manner in which undisclosed income of Rs. 5 crore has been derived, and included in computation of income, accompanying return in compliance to notice issued. 2.3. Aggrieved by penalty order passed by Ld. AO, assessee preferred appeal before the Ld. CIT (A) who confirmed the penalty levied by Ld. AO.