TMI Blog2020 (1) TMI 160X X X X Extracts X X X X X X X X Extracts X X X X ..... d penalty order u/s 271(1)(c) dated 24/06/2019 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed. 2. ₹ 3,71,743/-: The ld. CIT(A) erred in law as well as on the facts of the case confirming the penalty imposed u/s 271 (1)(c) of the Act. The penalty so imposed by the AO and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts kindly be deleted in full. 3. That the show cause notice issued u/s 274 and the consequent impugned penalty order dated 24/06/2019, is quite vague and does not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated and/or imposed i.e. whether for concealment of particulars of income or furnishing or inaccurate particulars of income. The impugned penalty order being contrary to the judicial principle laid down kindly be quashed. 4. That appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing. 2. Rival contentions have been heard and record perused. Facts in brief ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act is concerned, I found on perusal of the show cause notice issued u/s 274 r/w S. 271(1)(c) dated 05.12.2016, wherein it is not at all clear as to for what precise charge, the assessee was asked to show cause viz. whether the charge is that the assessee has furnished inaccurate particulars of income or it was for concealing particulars of such income inasmuch as a bare perusal of the said show cause notice clearly reveal that the inappropriate words/unwanted charge has not been struck off. The AO neither scored out nor ticked which particular part of alleged offence, he was relying inasmuch as the word or has been used between the two offences in the SCN. 7. The extract from SCN, is reproduced hereunder: x x x x it appears that you have concealed the particulars of your income or furnished inaccurate particulars of income. In fact, this confusion with the AO even continued while passing the impugned penalty order inasmuch as at the end of the order, while concluding and computing the penalty, the AO has stated as under --- concealed income/ inaccurate particulars of income - - ₹ 14,10,350/- . Thus, even while imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich limb of Section 271 (1) (c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. In the absence of which no penalty should be levied on the assessee as determination of such limb is sine qua non for imposition of penalty under section 271 (1) (c) of the Act. 10. There can be no doubt that penalty u/s. 271(1)(c) of the Act is levied for concealing particulars of income or for furnishing inaccurate particulars of such Income, which are the two limbs of this provision. In other words, it is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 of the Act, which is the jurisdictional notice, for visiting an assessee with the penal provision. The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of CIT v. Virgo Marketing P Ltd reported in [2008 171 Taxman 156 has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment then the notice has to be appropriately marked Similar is the case for furnishing inaccurate particulars of income. (p) Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c) i.e. whether it is for concealment of income or for furnishing of incorrect particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 13. Thereafter, in so far as the manner in which the statutory notice was required to be issued, the Hon'ble Court concluded thus: (p) Notice u/s 274 of the Act should be specifically state the grounds mentioned in section 271(1)(c), i.e. whether it is for concealment of income or for furnishing of incorrect particulars of income. 14. Finally, in concurring with the findings recorded in the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed. 17. The SLP filed by the department in the aforesaid case also was dismissed by the Hon'ble Supreme Court vide Petition for Special Leave to Appeal (C) No .... ./2016 (CC No. 11485/2016) dated 05.08.2016. 18. The Hon ble Bombay High Court in the case of CIT v. Shri Samson Perinchery [Income Tax Appeal No. 1154 of 2014 and others dated 05.01.2017] had also occasion to consider a similar issue. In this case, though proceedings u/s. 271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income, in the notice issued u/s. 274 r.w.s. 271 of the Act in the standard form, the charge for which it was issued was also not identified, as in the present case. In deleting the levy, so far as non-specification of the default in the jurisdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: 7 Therefore, the issue herein stands concluded in favour of the Respondent-Assessee by the decision of the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was prevailing on the date the decision was rendered on 27.08.2012. In view of the observation made in the said judgement, we are of the opinion that the contention raised by the appellant is required to be accepted and in the finding of Assessing officer in the assessment order it is held that the A.O. has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order . 21. In view of the above discussion, we conclude that the impugned penalty order is contrary to the judicial principle laid down in various decisions of the Hon ble Supreme Court, High Court and the Coordinate Bench as discussed above in so far as notice issued U/s 274 of the Act and consequent impugned penalty order dated 24/06/2019 is quite vague and does not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated and/or imposed i.e. whether for concealment of particulars of income or furnishing inaccurate particulars of income. 22. In the result, appeal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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