, , आयकर अपीलीय अधिकरण ’सी’

IN THE INCOME TAX APPELLATE TRIBUNAL ‘C’ BENCH, CHENNAI श्रीएम.बालगणेश , लेखासदस्यकेसमक्षएवं. श्रीएसएसववश्वनेत्ररवव , न्याययकसदस्य BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकरअपीलसं./ITA No.:2138&2139/Chny/2025 यनिाारणवर् ा / Assessment Year:2021-22 Assistant Commissioner of Shri Pramod Chordia Income Tax, vs. No.112, St. Marys Road, Vidya Central Circle-2(1), Theertha Nagar, Alwarpet, Chennai. Chennai-600 018.

[PAN:AAHPP0442L]

(अपीलार्थी /Appellant) (प्रत्यर्थी /Respondent)

अपीलार्थीकीओरस/े Appellant by : Mr.D.Anand, Advocate /Revenue by : Mr.C.P.Solomon, JCIT प्रत्यर्थीकीओरसे

/Date of Hearing : 23.10.2025 सनु वाईकीतारीख /Date of Pronouncement: 24.10.2025 घोर्णाकीतारीख आदेश /O R D E R PER M. BALAGANESH, AM :

These appeals by the Revenue are filed against the order of the learned Commissioner of Income Tax (Appeal), Chennai-19 (in short Ld.CIT(A) for the assessment years 2021-22, vide orders dated

13.05.2025 and 14.05.2025 respectively.

2.0 The Revenue has raised the following grounds of appeal before us:-

“….1. The Order of the learned Commissioner of Income Tax (Appeals) is erroneous on facts and in law.

2. The Ld.CIT(A) erred in deleting the penalty of Rs.84,60,000/- u/s 271AAB on wrong and erroneous application of the said provisions. 3. The Ld.CIT(A) erred in holding that for imposing a penalty, under Section 271AAB of the Act, mere income admitted cannot be classified as "undisclosed income" but the Assessing Officer has to demonstrate how the income impugned is to be treated as "undisclosed income for levy of penalty u/s 271AAB and in extrapolating the same when that was not there or intended in the provision itself ie 271AAB of the Act.

4. The Ld.CIT(A) erred in reliance on case of M/s. Future Gaming & Hotel Services Pvt. Ltd Vs ACIT (2025) of ITAT Chennai & the decision Padam Chand Pungliya Vs ACIT (ITA No.112/Jp/2018) to hold that mere disclosure of income to avoid litigation due not constitute "undisclosed income" for the purposes of imposing penalty u/s 271AAB as nowhere in the assessment or appellate proceedings has the assessee taken such stand.

5. For these grounds and any other ground including amendment of grounds that may be raised during the course of appeal proceedings, the Order of the Ld CIT(Appeals) may be set aside and that of the Assessing Officer may be restored…”

3.0 We have heard the rival submissions in the light of material available on records. We find that the Ld.CIT(A) had deleted the levy of penalty u/s. 271AAB of the Act in the facts and circumstances of the instant case both on law as well as on facts. The Ld.CIT(A) had indeed given a categorical finding that the penalty show cause notice issued u/s 271AAB of the Act does not specify the specific charge of offence committed by the assessee i.e. whether the assessee has under- reported his income or mis-reported his income. The Ld.CIT(A) by placing reliance on various decisions of Hon’ble High Courts and Tribunal had cancelled the levy of penalty u/s 271AAB of the Act on the point of defective show cause notice itself. The relevant observations of the Ld.CIT(A) in this regard are as under:-

“….6.4.16 Further, the order u/s 271AAB dated 29.06.2023 levying the penalty also fails to specify as to how the appellant has fulfilled the conditions of clause (a) of section 271AAB (1A) of the Act while accepting the total income in the return of income e-filed u/s 139 of the Act for the AY 2021-22. Further, the AO in the assessment order has initiated the penalty proceedings, u/s 271AAB of the Act for under reporting of income to the tune of Rs. 1,26,00,000/-. However, as evident in the penalty order passed u/s 271AAB of the Act dated 29.06.2023 has chosen to levy the penalty amounting Rs. 9,00,000/- which is 30% of Rs. 30,00,000/- as per the provisions of section 271AAB (1A) (a) of the Act and further proceeded to levy the penalty amounting Rs. 75,60,000/- which is 60% of Rs. 1,26,00,