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TMI Blog2017 (12) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... and in any view of the matter, action of Ld. CIT(A) in not quashing the penalty order framed by Ld. AO is beyond jurisdiction and without considering the facts and circumstances of the case and the impugned penalty order being illegal and void ab-initio and the impugned penalty order has been framed without considering the submissions/evidences of the assessee and without providing any adverse material on record. 3. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in passing the impugned penalty order being contrary to law as the assessment order framed under section 143(3) dated 26-03-2002 and additions made therein were also illegal, beyond jurisdiction and void ab-initio. 4. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in levying penalty u/s 271(1)(c) on the additions made in the assessment order u/s 143(3) dated 26-03-2002 as these additions are also contrary to law and facts. 5. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umption of jurisdiction for levy of penalty u/s 271(1)(c) of the Act by the AO. Accordingly, on the next date of hearing Ld. Counsel submitted his brief synopsis containing his submissions on various facets of jurisdictional aspects. Per contra Ld. Senior DR supported the order of lower authorities and vehemently submitted that the penalty should be confirmed in this case. 5. We have heard both the parties at length and also considered the material and copies of judgment placed before us by both the sides. For the sake of ready reference and convenience, the brief synopsis on jurisdictional ground submitted by ld. Counsel for the assessee, are reproduced below: "I) Assumption of jurisdiction is bad since no charge has been clearly levied in notice, assessment order and penalty order as to the fact whether there was any concealment of income or furnishing of inaccurate particulars of income. Reference may be made to the following: PB 28-29 is the copy of jurisdictional notice issued u/s 274 showing that notice is invalid in the eyes of law on following grounds: a) Some inappropriate clause has been ticked which is not concerned with levy of penalty u/s 271(l)(c). It appears ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT in ITA No.1390/Del/2011 AY 2001-02, ITAT Delhi M/s Victor Electrodes Ltd. vs. ITO in ITA No. 334/D/2009 A.Y. 2006-07 dated 9.8.2012 III) Without prejudice to the above, it is submitted that Ld. AO has imposed the penalty for 2 mutually exclusive situations i.e. concealing the particulars of its income and furnishing inaccurate particulars of its income which is not permissible in law in view of the nature of penalty proceedings being of quasi criminal in character where definiteness as to the charge is must and in view of the following judicial decisions: New Sorathia Engg Co. vs. CIT in 282 ITR 642 (Guj) (CLC Page no. 112-114) CIT vs. Manu Engg. Works in 122 ITR 306 (Guj) (CLC Page no. 115-119) CIT vs. Lakhdhir Lalji in 85 ITR 77 (Gujarat) Commissioner of Wealth Tax and Income Tax vs. T. Girija Ammal in 282 ITR 614 (Chennai) Navinbhai M. Patel vs. ITO in 27 1TD 411(Ahmedabad) IV) Our Submission with respect to M/s. Maharaj Garage & Company vs. CIT in Income Tax Reference No.21 of 2008: The above said judgment is not applicable on the facts of our case in view of following reasons: a) In this judgment, there is no reference to judgment of Hon'ble Supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... khlal Shah vs. DOT in ITA No. 2293/Mum/2013 dated 4.3.2015 6. We have carefully considered all the submissions. With the assistance of both the parties we examined jurisdictional notice issued by the AO u/s 274 dated 26.03.2002. It is noticed from the perusal of said notice that the applicable clause pre-printed on the notice for levy of penalty was not ticked and it reads as under: " have concealed the particulars of your income or............ furnished inaccurate particulars of such income." 7. On the contrary, some other clause has been ticked which seems to be some other default and which has nothing to do with levy of penalty u/s 271(1)(c), which reads as under: "have without reasonable cause failed to comply with a notice under section 22(4)/23(2) of the Indian Income-tax Act,1922 or under section 142(1)/143(2) of the Income-tax Act,1961." Thus from the above, it is clear that as far as jurisdictional notice is considered, no clear charge has been levied at all that whether a default committed by assessee was on account of concealment of income or it was on account of furnishing of inaccurate particulars of income by the assessee. Our attention was also drawn upon the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned under section 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the other breach. This is more so, as an assessee would respond to the ground on which the penalty has been initiated/notice issued. It must, therefore, follow that the order imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the assessee has no notice. 10. During the course of hearing, our attention was drawn by the Ld. Counsel of assessee upon the reply filed by the assessee dated 27.02.2012 to the penalty notice of the Ld. AO wherein objection was raised to the AO that assumption of jurisdiction was bad as there was no belief of the AO in the assessment order or in the penalty notice as to whether the penalty proceedings were initiated by the AO for concealment of income or furnishing of inaccurate particulars of income by assessee. Relevant portion of the reply is reproduced below for ready reference: "Our above named client is in receipt of your letter dated F ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of SSA's Emerald Meadows, (supra) and Ashok Pai, (supra) is directly applicable on the issue involved before us. 12. It is further noted by us that the similar view has been followed recently by Hon'ble Andhra Pradesh High Court in the case of Pr. CIT vs. Smt. Baisetty Revathi dated 13.07.2017 in ITA No. 684 of 2016, wherein Hon'ble High Court observed inter alia 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 term. Otherwise, an assessee 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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