PANKAJKUMAR CHIMANLAL LODHIYA,RAJKOT vs. THE ACIT, CENTRAL CIRCLE-2, RAJKOT, RAJKOT

Facts

The assessee filed six appeals against penalty orders under sections 271(1)(c) and 271AAB(1)(c) of the Income Tax Act, 1961, arising from assessment proceedings following a search action. The penalties were levied on various additions including undisclosed foreign bank accounts, deemed rental income, disallowance of commission without TDS, and advances from seized documents.

Held

The Tribunal ruled that penalty notices under section 271(1)(c) were invalid as they ambiguously charged both "concealment of income" and "furnishing inaccurate particulars" without specifying the exact default. Penalties under section 271AAB(1)(c) for deemed rental income were deleted as they were based on estimated additions, and penalties for additions from seized documents were deleted because the underlying additions had already been set aside by a previous Tribunal order, applying the maxim "Sublato fundamento cadit opus".

Key Issues

1. Whether a penalty notice under section 271(1)(c) is valid if it vaguely charges both "concealment of income" and "furnishing inaccurate particulars". 2. Whether penalties under section 271AAB(1)(c) can be sustained on estimated additions or on additions subsequently deleted by the Tribunal.