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TMI Blog2017 (4) TMI 1029X X X X Extracts X X X X X X X X Extracts X X X X ..... id down in the judicial precedents discussed herein above, we are of the opinion that the Assessing Officer having failed to record his satisfaction while initiating proceedings for imposition of penalty under section 271(1)(c) as to which limb of the provisions of section 271(1)(c) is attracted, the order imposing penalty is invalid. In view of the aforesaid, we hold that the imposition of penalty u/s 271(1)(c) in the present case is not justified. - Decided in favour of assessee. - ITA no.2158/Mum./2016 - - - Dated:- 24-2-2017 - SHRI SAKTIJIT DEY, JUDICIAL MEMBER AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER For The Assessee : Shri Jitendra Jain For The Revenue : Ms. Pooja Swaroop ORDER PER SAKTIJIT DEY, J.M. Afore ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee should have added back the same while computing his total income. As it appears, assessee accepted the aforesaid decision of the Assessing Officer and did not contest the addition. On the basis of these two additions, the Assessing Officer initiated proceedings for imposition of penalty under section 271(1)(c). In reply, to the show cause notice issued under section 274 r/w section 271(1)(c), though, the assessee objected to the initiation of proceeding for imposition of penalty under section 271(1)(c) by explaining that the non disclosure of income resulting in addition was on account of oversight, however, the Assessing Officer rejecting the explanation of the assessee proceeded to impose penalty under section 271(1)(c) alleging filing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Pvt. Ltd., ITA no.1533/Mum./2014 dated 05.12.2016; and iii) CIT v/s Dalmiya Diechem Industries Ltd., ITA no.1396/ Mum./2013, dated 06.07.2015. 4. The learned Authorised Representative drawing our attention to assessment order submitted, the Assessing Officer has not recorded his satisfaction whether the assessee has concealed the particulars of its income or has furnished inaccurate particulars of income. He submitted, in the notice issued under section 274 r/w 271(1)(c) also the Assessing Officer has not specified which limb of section 271(1)(c) is attracted by striking off one of them. Therefore, he submitted, the imposition of penalty is bad in law. In this context, he relied upon the decision of the Hon'ble Jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion. Thus, assessee s explanation that non disclosure of two items of income is on account of omission due to oversight is believable since the auditors have also failed to detect such omission in the audit report. Therefore, in our opinion, the ratio laid down by the Hon'ble Supreme Court in PricewaterhouseCoopers Pvt. Ltd. (supra), clearly applies to the facts of the present case as, in our opinion, it is a bonafide mistake committed by the assessee. The other decision relied upon by the learned Authorised Representative also support such view. That being the case, in our opinion, imposition of penalty under section 271(1)(c) in the present case is not justified. Even otherwise also, the penalty imposed under section 271(1)(c) is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to explain its stand, thereby, violates the principles of natural justice. As held by the Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC), the aforesaid principle laid in Dilip N. Shroff (supra) still holds good in spite of the decision of the Hon'ble Supreme Court in UOI v/s Dharmendra Textile Processors (2008) 306 ITR 277 (SC). The Hon'ble Jurisdictional High Court in CIT v/s Smt. Kaushalya Ors., [1995] 216 ITR 660 (Bom), observed that notice issued under section 274 must reveal application of mind by the Assessing Officer and the assessee must be made aware of the exact charge on which he had to file his explanation. The Court observed, vagueness and ambiguity in the notice depriv ..... X X X X Extracts X X X X X X X X Extracts X X X X
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