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Facts
The assessee's appeal is against the penalty imposed under Section 271AAB of the Income Tax Act, 1961, which was confirmed by the CIT(A). The penalty was imposed on the ground that the assessee admitted undisclosed income during search proceedings and paid the tax on it.
Held
The Tribunal held that the Assessing Officer failed to specify the reasons and the specific clause under which the penalty under Section 271AAB was being imposed in the notice issued under Section 274. Therefore, the penalty was deleted.
Key Issues
Validity of penalty under Section 271AAB when the notice under Section 274 does not specify the reasons and the specific clause for imposing the penalty.
Sections Cited
143(3), 271AAB, 274
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Income Tax Appellate Tribunal, RANCHI BENCH, RANCHI
Before: SHRI GEORGE MATHAN & SHRI RATNESH NANDAN SAHAY
Assessee represented by Shri Rajiv. R. Mittal, A.R. Department represented by Shri Rajib Jain, CIT-DR Date of hearing 06/01/2026 Date of pronouncement 03/02/2026 O R D E R PER: BENCH 1. This is an appeal filed by the assessee against the order of the ld. CIT(A), Patna-3, Patna in Appeal No. CIT(A), Patna-3/10082/2018-19 dated 31/03/2025 for the A.Y. 2016-17 by raising following grounds of appeal:
1. The order of the Asst. Commissioner of Income Tax, Central Circle -
1. Ranchi is bad in law and facts.
2. The Commissioner of Income Tax (Appeal) erred in confirming the penalty U/s Sec 271AAB as per order of Asst. Commissioner of Income Tax, Central Circle -
1. Ranchi based on notice issued for penalty u/s 274 of the Income Tax Act 1961.
3. The Commissioner of Income Tax (Appeal) erred in not following the orders of Jurisdictional Tribunal, High Courts as well as Supreme Court of India.
4. Any other grounds if any will be urged at the time of the hearing."
2. The facts of the case, in brief, are that the assessment order under Section 143(3) of the Income Tax Act, 1961 (in short, the Act) was passed on 27/12/2017 wherein income of the assessee was assessed at ₹ 33,42,020/-. The penalty proceedings under Section 271AAB of the Act was also initiated by Suresh Kr Modi HUF vs ITO the Assessing Officer while passing the order under Section 143(3) of the Act. Subsequently, the Assessing Officer passed penalty order under Section 271AAB of the Act on 28/06/2018 and imposed a penalty of ₹ 3,01,520/- being 10% of the tax sought to be evaded on the ground that the assessee had admitted the quantum of undisclosed income in course of search and seizure proceedings and disclosed the same in the income tax return filed by the assessee and paid the requisite tax on that.
3. Aggrieved by the penalty order, the assessee preferred appeal before the ld. CIT(A), who vide the impugned order dismissed the appeal of the assessee and confirmed the penalty order passed by the Assessing Officer rejecting the grounds taken by the assessee that the notice under Section 271AAB of the Act was issued in a routine manner without mentioning the specific clauses of Section 271AAB of the Act.
4. Aggrieved by the order of ld. CIT(A), this appeal has been filed by the assessee before this Tribunal.
During the appellate proceedings before us, the appellant submitted a copy of the notice issued under Section 274 read with section 271AAB of the Act issued to the assessee where nothing has been specified by the Assessing Officer as to under which provisions, the Assessing Officer imposed penalty on the assessee and rather mentioned "have concealed the particulars of your income or furnishing inaccurate particulars of such income". The ld. AR of the assessee has relied on the decision of the Coordinate Bench of this Tribunal in for the A.Y. 2016-17 order dated 16/07/2020 and ITA No.