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TMI Blog2018 (4) TMI 39X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in the notice by striking off of irrelevant charge the initiation is bad in law. Ld. Counsel for the assessee refereing to the penalty order submitted that the Assessing Officer stated that the penalty was issued for concealing income at Para No.7 and stated that assessee is concealed particulars of income at para No.8. Therefore, he submitted that the charge is vague and the Assessing Officer is not clear as to for which charge the penalty is levied and therefore the penalty order is bad in law. He placed reliance on the of the Coordinate Bench in the case of Shri Jayant B Patel v. ACIT in ITA.No. 1650 to 1653/Mum/2017 and ITA.No. 3113/Mum/2017 dated 26.07.2017. 3. Ld.DR vehemently supported the orders of the authorities below and placed reliance on the decision of the Hon'ble Supreme Court in the case of MAK Data (P.) Ltd. v. CIT [38 taxmann.com 448]. 4. We have heard the rival submissions, perused the orders of the authorities below, the notice issued u/s. 274 r.w.s. 271 of the Act, Assessment Order and the penalty orders. On a perusal of the notice issued u/s. 271(1)(c) of the Act for initiation of proceedings, we find that the Assessing Officer did not strike off and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eciated even at the level of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T.Ashok Pai, 292 ITR 11 (SC). Therefore, if the two expressions, namely 'concealment of the particulars of income' and 'furnishing of inaccurate particulars of income' have different connotations, it is imperative for the assessee to be made aware as to which of the two is being put against him for the purpose of levy of penalty u/s 271(1)(c) of the Act, so that the assessee can defend accordingly. It is in this background that one has to appreciate the preliminary plea of assessee, which is based on the manner in which the notice u/s 274 r.w.s. 271(1)(c) of the Act dated 10.12.2010 has been issued to the assessee company. A copy of the said notice has been placed on record and the learned representative canvassed that the same has been issued by the Assessing Officer in a standard proforma, without striking out the irrelevant clause. In other words, the notice refers to both the limbs of Sec. 271(1)(c) of the Act, namely concealment of the particulars of income as well as furnishing of inaccurate particulars of income. Quite clearly, non-striking-off of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of mind by the Assessing Officer is no defence inasmuch as the Hon'ble Supreme Court has approved the factum of non-striking off of the irrelevant clause in the notice as reflective of non-application of mind by the Assessing Officer. Since the factual matrix in the present case conforms to the proposition laid down by the Hon'ble Supreme Court, we proceed to reject the arguments advanced by the ld. CIT-DR based on the observations of the Assessing Officer in the assessment order. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court also in the case of Shri Samson Perinchery, ITA Nos. 1154, 953, 1097 & 1126 of 2014 dated 5.1.2017 (supra) and the decision of the Tribunal holding levy of penalty in such circumstances being bad, has been approved. 11. Apart from the aforesaid, the ld. CIT-DR made an argument based on the decision of the Hon'ble Bombay High Court in the case of Smt. Kaushalya & Others, 216 ITR 660 (Bom.) to canvass support for his plea that non-striking off of the irrelevant portion of notice would not invalidate the imposition of penalty u/s 271(1)(c) of the Act. We have carefully considered t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified." In the instant case also, we are of the view that the AO has issued a notice, that too incorrect one, in a routine manner. Further the notice did not specify the charge for which the penalty notice was issued. Hence, in our view, the AO has failed to apply his mind at the time of issuing penalty notice to the assessee." 12. The aforesaid discussion clearly brings out as to the reasons why the parity of reasoning laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) is to prevail. Following the decision of our coordinate Bench in the case of Dr. Sarita Milind Davare (supra), we hereby reject the aforesaid argument of the ld. CIT-DR. 13. Apart from the aforesaid discussion, we may also refer to the one more seminal feature of this case which would demonstrate the importance of non-striking off of irrelevant clause in the notice by the Assessing Officer. As noted earlier, in the assessment order dated 10.12.2010 the Assessing Officer records that the penalty proceedings u/s 271(1)(c) of the Act are to be initiated for furnishing of inaccurate particulars ..... X X X X Extracts X X X X X X X X Extracts X X X X
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