2018 (6) TMI 1681 - ITAT JAIPUR

Penalty u/s 271(1) - search initiated u/s 132 - defective notice - Assessment Year involved is A.Y. 2008-09 and the due date of filing the return was 31-07-2008. The search operation was conducted on 13-10-2010 i.e. after the due date for filing the return 31-07-2008 - HELD THAT:- The facts are not denied that the assessee disclosed additional income in all the years in the return of income filed in response to notices issued u/s 153A of the Act. The ld. CIT(A) considered the case and held that Explanation 5A to Section 271(1)(c) is applicable in this case because the search was carried out after 1st of June 2007 i.e on dated 13.10.2010. However, simply because the assessee has agreed and offered the additional income during the course of the search and disclosed the same in the returns u/s 153A, does not obviate the necessity and is rather a precondition for the AO to make sure that the show cause notice u/s 274 r.w 271(1)(c), specifically state the grounds mentioned in S. 271(1)(c) i.e whether it is for concealment of income or furnishing of inaccurate particulars of income. Merely sending a printed performa without striking off the particular limb or specifying the particular ground or default would not satisfy the requirement of law. The assessee must know specifically the ground which he has to meet otherwise, no penalty can be imposed on the assessee.

AO has not specified which limb of the provision, the assessee was asked to reply. This does not meet with the requirement of law.

The Hon’ble Karnataka High Court in the case of CIT vs. M/s Manjunatha Cotton & Ginning Factory & Ors. [2013 (7) TMI 620 - KARNATAKA HIGH COURT] held that sending printed form where all the grounds mentioned in section 271 would not satisfy the requirement of law. The assessee should know the ground which he has to meet specifically, otherwise, the principle of natural justice is offended on the basis of such proceedings, no penalty could be could be imposed to the assessee. Notices issued u/s 274 r.w.s. 271(1)(c) of the Act dated 19.03.2013 are not valid and the same are quashed. - Decided in favour of assessee.