Section 271AAB(1)(c) — the law in short
What the courts have decided on section 271AAB(1)(c), in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.
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PCIT v Jai Maa Jagdamba Flour Private Limited
High CourtHelps taxpayer
After a search on or after 1 July 2012, can the officer levy penalty under s.271(1)(c) instead of s.271AAB?
No, not for the specified previous year. The Jharkhand High Court held that s.271AAB opens with a non obstante clause and excludes s.271(1)(c) where the undisclosed income relates to the specified previous year. Where the search was on 3 September 2014 the penalty, if any, had to be levied under s.271AAB, and because the assessee had admitted nothing in a s.132(4) statement and paid no tax on admitted income, the case fell under clause (c) of s.271AAB(1). The penalty actually levied under s.271(1)(c) could not stand. The Court also held it immaterial that no incriminating document had been found, because the statute keys the choice of section to the date of the search.
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Rashmi Jalan v ACIT
ITATHelps taxpayer
The 271AAB notice does not say which clause or what rate. Can the penalty survive?
No. Section 271AAB contains clauses (a), (b) and (c) with different conditions and different rates, so an omnibus show-cause notice that names neither the clause nor the rate leaves the assessee unable to know the case to be met and denies a real opportunity under s.274. The Tribunal also held, independently, that the levy had no foundation where no statement was recorded under s.132(4) and the returned income was accepted under s.143(3) without any addition.
Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.
