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TMI Blog2017 (11) TMI 1004X X X X Extracts X X X X X X X X Extracts X X X X ..... sment Year 2009-10. 2. Facts of the case, in brief, are that the assessee is an individual deriving income from wholesale trade in dhalls and pulses, filed his return of income by declaring taxable income of ₹ 2,89,420/-. The case of the assessee was selected for scrutiny and assessment is completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') by making additions towards undisclosed purchases and sales at ₹ 4,18,000/- and unexplained cash deposits of ₹ 2,73,000/-. The Assessing Officer, thus, determined the total income of the assessee at ₹ 9,80,510/- and issued show-cause notice why penalty should not be levied under section 271(1)(c) of the Act. In response to the notice, the assessee has submitted that he neither concealed any income nor furnished inaccurate particulars, but he agreed for the above two additions to avoid any further litigation. After considering the explanation of the assessee, the Assessing Officer has concluded that this is a fit case for levy of minimum penalty and accordingly penalty of ₹ 2,07,237/- was levied under section 271(1)(c) of the Act. 3. On appeal, ld. CIT(A) ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer dated 27/10/2011. In this context, learned counsel for the assessee has submitted that the notice issued by the Assessing Officer is not clear whether notice issued under section 271(1)(c) is for concealment of income or furnished inaccurate particulars. Therefore, the notice issued by the Assessing Officer is not a valid notice in the light of the latest judgment of the Hon'ble Supreme Court in the case of CIT Vs. SSA s Emerald Meadows [(2016) 73 taxman.com 248 (SC)] and also the Hon'ble Jurisdictional High Court of Telangana A.P. in I.T.T.A. No. 684/2016 in PCIT Vs. Smt. Baisetty Revathi dated 30/07/2017. 10. On the other hand, learned Departmental Representative has submitted that at the time of issuance of notice, the Assessing Officer is not sure about the penalty either for concealment of income or furnishing inaccurate particulars. Therefore, it is a premature notice and submitted that the notice issued by the Assessing Officer is a valid notice. 11. We have heard both the sides, perused the material available on record and orders of the authorities below. 12 The only issue for adjudication before us is whether the notice issued by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of SSA s Emerald Meadows (supra). The coordinate bench of ITAT Visakhapatnam in the case of Konchada Sreeram Vs. ITO in ITA No. 388/VIZ/2015, by order dated 06/10/2017 has considered the validity of notice by following the above referred to judgments and held that notice issued by the Assessing Officer is not a valid notice and accordingly quashed. For the sake of convenience, the relevant portion of the order is extracted as under:- 6. We have heard both the parties and perused the material placed on record. In this case, the assessee has not filed the return of income. The department has conducted the survey u/s 133A and completed the assessment u/s 143(3) on total income of ₹ 15,43,041/- and initiated penalty proceedings u/s 271(1)(c). The fact is that long term capital gains for sale of the property have come to the notice of the assessing officer because of the efforts made by the department. Therefore, the AO has initiated the penalty proceedings u/s 271(1)(c) and issued show cause notice in the printed proforma of penalty. The AO has issued the penalty notice which reads as under : WHEREAS in the course of the proceeding before me for the Asst. Year 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alid. The assessing officer did not strike off the irrelevant column in the notice and made known the assessee whether the penalty was initiated for the concealment of income or for furnishing the inaccurate particulars. In the assessment order also the AO simply recorded that the penalty proceedings u/s 271(1)(c) are initiated separately. Neither in the assessment order nor in the penalty notice, the assessing officer has put the assessee on notice for which offence, the penalty u/s 271 was initiated. Therefore, the case is squarely covered by the decision of the Hon ble Jurisdictional High Court of cited (supra) wherein the Hon ble high court held as under: On principle, when penalty proceedings are sought to be initiated by the revenue under Section 271(1)(c) of the Act of 1961, the specific ground which forms the foundation therefore has to be spelt out in clear terms Otherwise, on assesee would not have proper opportunity to put forth his defence. When the proceedings are penal in nature resulting in imposition of penalty ranging from 100% to 300% of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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