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TMI Blog2017 (11) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on notice for which offence, the penalty u/s 271 was initiated - Decided in favour of assessee. - I.T.A. No. 388/Viz/2015 - - - Dated:- 6-10-2017 - V. Durga Rao (Judicial Member) And D. S. Sunder Singh (Accountant Member) For the Appellant : G. V. N. Hari, AR For the Respondent : Y. Sesha Srinivas, DR ORDER D. S. Sunder Singh (Accountant Member) This appeal is filed by the assessee against the order of the Commissioner of Income Tax (Appeals) [CIT(A)]-1, Visakhapatnam vide ITA No.28/2010-11/ITO, W-1(1),Vsp/2015-16 dated 18.08.2015 passed u/s 271(1)(c) of the I.T.Act,(Act) 1961 for the assessment year 2008-09. All the grounds of the appeal are related to the levy of Penalty u/s 271(1)(c) of the act. The assessee along with appeal memo in Form No.36 filed four grounds on merits. Subsequently, the assessee filed the additional ground challenging the validity of issue of notice u/s 271(1)(c) of the act. The assessee has not filed the return of income though the due date for filing return of income was expired. Therefore, the assessing officer(AO) conducted a survey u/s 133A on 07.02.2009 and collected the information regarding sale of property ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or furnishing the inaccurate particulars or for the concealment of income, leaving the assessee in a confused state of affairs for which limb of the notice the assessee is required to furnish the explanation? The Ld.AR submitted that the Hon ble High Court held in the cited judgement that the notice issued without striking irrelevant column in the notice issued u/s 271(1)(c) held to be invalid. This view was supported by the order of Hon ble High Court of Karnataka in the case of Manjunatha Cotton and Ginning Factory. Therefore the ld.A.R argued that in the asssessee s case also, the AO had issued notice u/s 271(1)(c) without putting the assessee on notice for which limb of the notice, i.e. whether for furnishing of inadequate particulars or for concealment of income, the assessee is required to furnish the explanation. Hence, Ld.AR argued that the additional ground goes to the root of the penalty hence requested for admission. The Ld .D.R objected for admission of the additional ground. 3. We have heard both the parties and we are of the view that there is merit in the submissions made by the Ld.A.R and admit the additional ground. 4. During the appeal hearing, the Ld.AR rei ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh the facts of the case it is noticed that the assessee has sold capital asset and received the sale consideration. The sale was completed on 12.10. 2006 and 07.03.2007 respectively. The sale consideration was chargeable to capital gains tax but the assessee has not filed the return of income even after the due date Till such time the survey was conducted on 07.02.2008, the issue regarding the capital gains could not have come to the notice of the department Only after conducting the survey, the assessee has filed the returns that too admitting nil income in the return against the taxable income under capital gains to the extent of ₹ 15,43,041/- In the return of income the assessee has made false claims without any evidences evidencing that the land sold was agricultural land, Similarly the assessee has also not produced any evidence regarding the purchase of agricultural land. During the course of survey also the assessee has not stated anything regarding the investment in agricultural land The assessee has not produced any evidence claiming that the sale consideration was invested in specified deposits as required under section 54B of the I.T. Act. Therefore the claim of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 200708 it appears to me that you have concealed the particulars of your Some or furnished inaccurate particulars of such income. 6.1. From the notice issued by the AO, it is observed that the assessing officer had issued the notice for concealment of income or for furnishing of inaccurate particulars. As per the notice, the assessing officer was not sure of which limb of the offence he sought the explanation from the assessee, whether it was for the concealment of income or for furnishing of inaccurate particulars. As per the decision of the Hon ble Jurisdictional High Court cited, for starting the penalty proceedings, the condition precedent is that the assessing officer must be satisfied that a person has either concealed the particulars of his income or furnished inaccurate particulars of such income. The person who is accused of the conditions mentioned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting an 'or' between the two, as in the present case. This ambiguity in the show-cause notice is further compounded presently by the confused finding of the Assessing Officer that he was satisfied that the assessee was guilty of both. We are therefore of the opinion that the order under appeal does not brook interference on any ground. We find no question of law, much less a substantial one, arising for consideration warranting admission of this appeal. 6.2. On the similar facts, the Coordinate Bench of ITAT, Visakhapatnam in ITA No.229/Viz/2015 in the case of Narayana Reddy Enterprises, following the order of the Coordinate Bench in the case of Smt. Makina A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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