2024 (6) TMI 878 - ITAT CHENNAI

Penalty levied u/s 271(1)(c) - Defective notice u/s 274 - no proper satisfaction was drawn by Ld. AO qua exact charge against the assessee before levying impugned penalty - HELD THAT - Concealment of income and furnishing of inaccurate particulars of income are two different charges. These two expressions, in terms of ratio of various binding judicial precedents, carry different connotation / charges and non-framing of specific charge against the assessee would vitiate the penalty proceedings. The penalty could be levied only for a specific charge. Furnishing of inaccurate particulars of income would arise in a situation where the assessee has not disclosed the particulars correctly or the particulars disclosed by the assessee are found to be incorrect whereas concealment of particulars of income would mean that the assessee has concealed the income and has not reflected certain income, at all, in its return of income. Therefore, for each of the addition, AO has to specify as to which limb was applicable to the facts of the case and it could not be left to mere presumption or guess-work of the assessee. Framing of specific charges is sine-qua-non for levy of penalty since the assessee must be put to allegations for which the penalty was being levied. In the absence of such a specific charge, the penalty would be bad-in-law and the same is not a curable defect u/s 292BB. This position has been settled in numerous binding judicial precedents. Considering the same, we would have no hesitation in holding that these two charges are quite different charges and carry different connotation / meaning. The non-framing of specific charge would make the notice defective. The assessee assailed the notice on the ground that specific charge was not framed against the assessee. The Hon ble Court, in Amtex Software Solutions Pvt. Ltd. 2019 (6) TMI 1182 - MADRAS HIGH COURT concurred with assessee s submissions that the distinction between the two expressions viz. concealed particulars of income and furnished inaccurate particulars of income was beyond any pale of doubt. There could not be two opinions or disputes about the fact the aforesaid two expressions are distinct and that they fall under different realms. The Hon ble Court finally directed revenue to keep the show-cause notice in abeyance and issue a corrigendum / addendum / errata to the assessee clearly stating the grounds on which the notice was issued. In the present case, that stage is already over since the assessee is in second appeal before us. Therefore, in our considered opinion, this case, in fact, supports the case of the assessee that non-framing of specific charges would be fatal to penalty proceedings. There was failure on the part of AO to frame specific charge against the assessee and accordingly, the penalty would not be sustainable in the eyes of law. By deleting the impugned penalty, we allow the appeal. Consequently, going into the merits of the penalty has been rendered academic in nature. AO proposed penalty for under-reporting / misreporting of income and levied penalty in both the years for under-reporting of income - AO has invoked both the limbs viz. under-reporting / misreporting of income in the penalty notice. These two expressions, on the same analogy as held earlier, would be separate and distinct charges. Applying the same logic and reasoning as for AY 2016-17, we delete impugned penalty in both the years. Consequently, going into the merits of the penalty has been rendered academic in nature.