IN THE INCOME TAX APPELLATE TRIBUNAL DEHRADUN “DB” BENCH: DEHRADUN BEFORE SHRI YOGESH KUMAR U.S, JUDICIAL MEMBER &

SHRI MANISH AGARWAL, ACCOUNTANT MEMBER [THROUGH VIRTUAL MODE]

ITA No.101/DDN/2024 [Assessment Year : 2010-11]

Mohit Batola vs ACIT

155, Village Miyanwala Central Circle P.O.-Harrawala, Dehradun, Dehradun, Uttarakhand Uttarakhand-248001 PAN-AFTPB3533M APPELLANT RESPONDENT Assessee by Shri Verendra Kalra, CA Revenue by Shri S.K.Chaterjee, CIT DR Date of Hearing 05.08.2025 Date of Pronouncement 30.10.2025 ORDER PER MANISH AGARWAL, AM :

The present appeal is filed by the assessee against the order dated 23.04.2024 by Ld. Commissioner of Income Tax (A)-3, Noida [“Ld.CIT(A)”] in Appeal No. CIT(A), Kanpur-4/10044/2009-10 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the penalty order dated 09.03.2021 passed u/s 271(1)(c) of the Act pertaining to assessment year 2010-11.

2. Brief facts of the case are that assessee is an individual, engaged in the business of providing land to big developers as well as purchase and sale of land/development work on land of others and also director of various different companies. A search action was conducted u/s 132 of the Act on 14.07.2010 at the residential premises of the assessee alongwith the Surya Builders/Rajeev Kumar group. Thereafter, notice u/s 153A was issued on 03.05.2011 and duly served upon the assessee requiring him to furnish the return of income on or before 20.05.2011. No compliance was made by the assessee thus another notice u/s 153A(1)(a) was issued to the assessee on 08.07.2011. Thereafter, assessee filed his return of income on 16.08.2011, declaring total income of INR 30,12,697/-. Thereafter, notice u/s 143(2) was issued and subsequently questionnaire alongwith notice u/s 142(1) was issued. In response assessee filed written explanation. During the course of search, books of accounts in the Tally software were taken from the computer of the assessee as seized documents. These books of accounts were incomplete and not properly maintained and having discrepancies in the opening and closing balances of the cash book and outstanding balances in the balance sheet as submitted by the assessee. The AO passed assessment order u/s 153A(1)(b) r.w.s. 144 of the Act on 28.03.2013 and assessed the income of the assessee at INR 1,88,32,680/- after making addition of INR 27,66,635/-; INR 1,26,41,300/- and INR 4,12,050/- against returned income of INR 12,72,956/-. Thereafter, the impugned order of penalty u/s 271(1)(c) of the Act was passed wherein penalty of Rs.8,46,856/- was levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income.

3. Before us, the Ld. AR of the assessee submits that at the time of initiation of the proceedings u/s 271(1)(c) of the Act, notice was issued to the assessee dated 28.03.2013. Thereafter another notice was issued on 21.12.2020. Ld. AR submits that from the perusal of both the notices (reproduced below), it could be seen that in both notices, it was not specified whether the penalty proceedings were initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. He thus, by following the order of Hon’ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factory reported in (2013) 359 ITR 565 requested for the deletion of the penalty being initiating without specifying the limb on which the penalty proceedings were initiated.

For ready-reference, both notices are reproduced as under:-

4. On the other hand, Ld. CIT DR for the Revenue vehemently supported the orders of the lower authorities and submitted that the AO has recorded the satisfaction in the assessment order that assessee has furnished inaccurate particulars of income and penalty was also levied for furnishing inaccurate particulars of income, therefore, the order of levy of penalty deserves to be upheld and merely for not struck off the limb in the penalty notice, such order should not be cancelled