Section 271AAB of the Income Tax Act

The decision most relied on for Section 271AAB is CIT v. Manjunatha Cotton & Ginning Factory (359 ITR 565), cited in 2,590 of the 797 judgments on BharatTax that turn on this section.

Leading authorities on Section 271AAB

CIT v. Manjunatha Cotton & Ginning Factory
359 ITR 565 · 2013 · High Court
2,590
citing judgments

A penalty notice issued under section 274 read with section 271(1)(c) is invalid if it fails to specify whether the penalty proceedings are initiated for concealment of income or for furnishing inaccurate particulars of income. This non-specification vitiates the penalty proceedings.

CIT v. SSA’s Emerald Meadows
73 Taxmann.com 248 · 2016 · Supreme Court
953
citing judgments

A notice issued under Section 274 read with Section 271(1)(c) is invalid if it fails to specify whether penalty proceedings are for concealment of particulars of income or furnishing inaccurate particulars of income. Such lack of specificity vitiates the penalty proceedings.

CIT v. Kaushalya
216 ITR 660 · 1995 · High Court
511
citing judgments

A penalty levied under Section 271(1)(c) for concealment or furnishing inaccurate particulars of income is not invalidated by the Assessing Officer's failure to strike off irrelevant portions in the show cause notice, provided the assessee understood the exact charge and suffered no prejudice, indicating an application of mind by the AO.

CIT v. Mithila Motor's (P.) Ltd.
149 ITR 751 · 1984 · High Court
248
citing judgments

Minor defects or mistakes in a penalty notice issued under Section 274 do not invalidate penalty proceedings under Section 271(1)(c) if the assessee suffers no prejudice and is aware of the charge. However, significant vagueness or ambiguity that demonstrates non-application of mind or causes prejudice can still render the notice invalid.

Dilip N. Shroff v. Jt. CIT
161 Taxmann 218 · 2007 · Supreme Court
236
citing judgments

Mens rea is a necessary ingredient to attract penalty under Section 271(1)(c) of the Income Tax Act, as 'inaccurate' signifies a deliberate act or omission by the assessee. Clause (iii) of Section 271(1) grants discretionary jurisdiction to the assessing authority regarding penalty amounts.

Ltd. v. DCIT
22 SOT 7 · 2008 · ITAT
123
citing judgments

An adverse inference cannot be drawn against an assessee based on a document found with a third party during a search, as possession is only attributable to the searched person. An addition to income based solely on an undated, unsigned seized document, without further corroborative evidence or inquiry, is not sustainable.

CIT v. Khoday Eswarsa & Sons 1972 CTR (SC) 295
83 ITR 369 · 1972 · Supreme Court
94
citing judgments

Penalty under section 271(1)(c) cannot be levied solely on the basis of findings in the assessment proceedings. The Assessing Officer must discharge the burden of proving concealment or inaccurate particulars with additional material.

Sir Shadilal Sugar and General Mills Ltd. v. CIT
168 ITR 705 · 1987 · Supreme Court
86
citing judgments

An assessee's agreement to an addition or voluntary disclosure of income does not automatically establish concealment for levying penalty under Section 271(1)(c). While such agreement may arise from various reasons like avoiding litigation, the assessee must still discharge the burden of proving that the addition was not due to concealment.

ACIT v. Marvel Associates
92 Taxmann.com 109 · 2018 · ITAT
80
citing judgments

Penalty under section 271AAB cannot be levied mechanically; the Assessing Officer must apply an independent mind, grant a hearing, and record satisfaction that the income genuinely falls within the statutory definition, which requires discovery of an unrecorded asset or income entry during search.

Janki Ram Bahadur Ram v. CIT
57 ITR 21 · 1965 · Supreme Court
67
citing judgments

The onus is on the Income Tax Department to prove that a particular receipt or amount is taxable and falls under the provisions of the Income-tax Act.

Judgments on Section 271AAB

Mohan Thakurdas Gurnani, Navi Mumbai vs. ITO Centeral Circle 5(2), Mumbai

In the result, all the five appeals of the assessee are partly allowed

ITA 439/MUM/2025[2016-17]Status: DisposedITAT Mumbai28 Mar 2025AY 2016-17

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No. 435/Mum/2025 (निर्धारण वर्ष / Assessment Year :2010-11) आयकर अपील सं./Ita No. 436/Mum/2025 (निर्धारण वर्ष / Assessment Year :2011-12) आयकर अपील सं./Ita No. 437/Mum/2025 (निर्धारण वर्ष / Assessment Year :2012-13) आयकर अपील सं./Ita No. 438/Mum/2025 (निर्धारण वर्ष / Assessment Year :2013-14) आयकर अपील सं./Ita No. 439/Mum/2025 (निर्धारण वर्ष / Assessment Year :2016-17) Mohan Thakurdas Gurnani Flat No. 2101, Moraj Casa Grande, Plot No. 57, Sector 17, Koperkhairne, Maharashtra-400709 V/S. बनाम Ito Central Circle 5(2) Room No. 427, 4Th Floor, Kautilya Bhavan, Bandra Kurla Complex, Bandra East, Maharashtra-400051 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpg8827D Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारिती की ओर से /Assessee By: None राजस्व की ओर से /Revenue By: Shri R. R. Makwana सुनवाई की तारीख / Date Of Hearing 12.03.2025 घोषणा की तारीख/Date Of Pronouncement 28.03.2025 आदेश / Order Page 2

For Appellant: NoneFor Respondent: Shri R. R. Makwana
Section 143(3)Section 153ASection 250Section 271(1)(c)Section 275

Mohan Thakurdas Gurnani, Navi Mumbai vs. ITO Central Circle 5(2), Mumbai

In the result, all the five appeals of the assessee are partly allowed

ITA 438/MUM/2025[2013-14]Status: DisposedITAT Mumbai28 Mar 2025AY 2013-14

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No. 435/Mum/2025 (निर्धारण वर्ष / Assessment Year :2010-11) आयकर अपील सं./Ita No. 436/Mum/2025 (निर्धारण वर्ष / Assessment Year :2011-12) आयकर अपील सं./Ita No. 437/Mum/2025 (निर्धारण वर्ष / Assessment Year :2012-13) आयकर अपील सं./Ita No. 438/Mum/2025 (निर्धारण वर्ष / Assessment Year :2013-14) आयकर अपील सं./Ita No. 439/Mum/2025 (निर्धारण वर्ष / Assessment Year :2016-17) Mohan Thakurdas Gurnani Flat No. 2101, Moraj Casa Grande, Plot No. 57, Sector 17, Koperkhairne, Maharashtra-400709 V/S. बनाम Ito Central Circle 5(2) Room No. 427, 4Th Floor, Kautilya Bhavan, Bandra Kurla Complex, Bandra East, Maharashtra-400051 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpg8827D Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारिती की ओर से /Assessee By: None राजस्व की ओर से /Revenue By: Shri R. R. Makwana सुनवाई की तारीख / Date Of Hearing 12.03.2025 घोषणा की तारीख/Date Of Pronouncement 28.03.2025 Page 2

For Appellant: NoneFor Respondent: Shri R. R. Makwana
Section 143(3)Section 153ASection 250Section 271(1)(c)Section 275

Mohan Thakurdas Gurnani, Navi Mumbai vs. ITO Centeral Circle 5(2), Mumbai

In the result, all the five appeals of the assessee are partly allowed

ITA 436/MUM/2025[2011-12]Status: DisposedITAT Mumbai28 Mar 2025AY 2011-12

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No. 435/Mum/2025 (निर्धारण वर्ष / Assessment Year :2010-11) आयकर अपील सं./Ita No. 436/Mum/2025 (निर्धारण वर्ष / Assessment Year :2011-12) आयकर अपील सं./Ita No. 437/Mum/2025 (निर्धारण वर्ष / Assessment Year :2012-13) आयकर अपील सं./Ita No. 438/Mum/2025 (निर्धारण वर्ष / Assessment Year :2013-14) आयकर अपील सं./Ita No. 439/Mum/2025 (निर्धारण वर्ष / Assessment Year :2016-17) Mohan Thakurdas Gurnani V/S. Ito Central Circle 5(2) Flat No. 2101, Moraj Casa Room No. 427, 4Th Floor, Grande, Plot No. 57, Sector Kautilya Bhavan, Bandra 17, Koperkhairne, Kurla Complex, Bandra Maharashtra-400709 East, Maharashtra-400051 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpg8827D Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारिती की ओर से /Assessee By: None राजस्व की ओर से /Revenue By: Shri R. R. Makwana सुनवाई की तारीख / Date Of Hearing 12.03.2025 घोषणा की तारीख/Date Of Pronouncement 28.03.2025 आदेश / Order Page 2

For Appellant: NoneFor Respondent: Shri R. R. Makwana
Section 143(3)Section 153ASection 250Section 271(1)(c)Section 275

Mohan Thakurdas Gurnani, Navi Mumbai vs. ITO Central Circle 5(2), Mumbai

In the result, all the five appeals of the assessee are partly allowed

ITA 435/MUM/2025[2010-11]Status: DisposedITAT Mumbai28 Mar 2025AY 2010-11

Bench: Shri Rahul Chaudhary & Smt. Renu Jauhriआयकर अपील सं./Ita No. 435/Mum/2025 (निर्धारण वर्ष / Assessment Year :2010-11) आयकर अपील सं./Ita No. 436/Mum/2025 (निर्धारण वर्ष / Assessment Year :2011-12) आयकर अपील सं./Ita No. 437/Mum/2025 (निर्धारण वर्ष / Assessment Year :2012-13) आयकर अपील सं./Ita No. 438/Mum/2025 (निर्धारण वर्ष / Assessment Year :2013-14) आयकर अपील सं./Ita No. 439/Mum/2025 (निर्धारण वर्ष / Assessment Year :2016-17) Mohan Thakurdas Gurnani V/S. Ito Central Circle 5(2) Flat No. 2101, Moraj Casa Room No. 427, 4Th Floor, Grande, Plot No. 57, Sector Kautilya Bhavan, Bandra 17, Koperkhairne, Kurla Complex, Bandra Maharashtra-400709 East, Maharashtra-400051 बनाम स्थायी लेखा सं./जीआइआर सं./Pan/Gir No: Aacpg8827D Appellant/अपीलार्थी .. Respondent/प्रतिवादी निर्धारिती की ओर से /Assessee By: None राजस्व की ओर से /Revenue By: Shri R. R. Makwana सुनवाई की तारीख / Date Of Hearing 12.03.2025 घोषणा की तारीख/Date Of Pronouncement 28.03.2025 आदेश / Order Page 2

For Appellant: NoneFor Respondent: Shri R. R. Makwana
Section 143(3)Section 153ASection 250Section 271(1)(c)Section 275