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TMI Blog2019 (1) TMI 1003X X X X Extracts X X X X X X X X Extracts X X X X ..... ly reveals that there has been no application of mind on the part of the A.O while issuing the same. As penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed. The non specifying of the charge in the ‘Show cause’ notice not only reflects the non application of mind by the A.O, but the same seriously defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1). Case of SA'S EMERALD MEADOWS [2016 (8) TMI 1145 - SUPREME COURT] to be followed - Decided in favour of assessee - ITA No. 757/Asr./2017 - - - Dated:- 17-1-2019 - Shri N.K. Saini, Vice President And Shri Ravish Sood, Judicial Member For the Appellant : Shri P.N. Arora, Advocate For the Respondent : Shri Lalit Mohan Jindal, D.R ORDER PER RAVISH SOOD, JM The present appeal filed by the assessee is directed against the order passed by the CIT(A)-2, Jalandhar, dated 08.08.2017 which in turn arises from the order passed by the Assessing Officer u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had filed her return of income for A.Y 2008-09 on 27.6.2008, declaring total income of ₹ 79,31,290/-. The return of income was initially processed u/s 143(1) of the I.T. Act. Subsequently, the case was selected for scrutiny assessment u/s 143(2) of the I.T Act. 5. The Assessing Officer while framing the assessment made the following additions/disallowances to the income of the assessee. Sr. No. Particulars Amount ( in Rs.) 1 Addition towards interest in respect of bank account with capital local area bank 15,159 2 Addition towards unexplained cash credits 3,10,000 3 Disallowance of commission expenses 3,00,000 On the basis of the aforesaid additions/disallowances the Assessing Officer assessed the income at ₹ 85,56,450/-. 6. Aggrieved, the assessee carried the matter in appeal before the Ld. CIT(A), who vide his order dated 04.08.2014 though deleted the addition of ₹ 3 lacs on account of commission expenses, but confirmed the remaining ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ;D.R') relied upon the orders of the lower authorities. It was submitted by the Ld. D.R that as the assessee was afforded sufficient opportunity in the course of penalty proceedings, and the latter had furnished her reply, thus, it was incorrect on her part to claim that no opportunity of being heard was afforded to her in the course of the penalty proceedings. 11. We have heard the authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record. Admittedly, on a perusal of the SCN , dated 31.12.2010, it stands revealed that the Assessing Officer had failed to strike off the irrelevant default while calling upon the assessee to explain as to why the penalty u/s 271 (1) (c) of the Act may not be imposed on her. Insofar, the validity of the jurisdiction assumed by the A.O is concerned, the same has been assailed before us on the ground that as the irrelevant default in the Show cause notice, dated 31.12.2010 was not struck off by the A.O, therefore, the assessee was not put to notice as regards the default for which she was called upon to explain as to why penalty may not be imposed on her under Sec. 271(1)(c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed. The non specifying of the charge in the Show cause notice not only reflects the non application of mind by the A.O, but the same seriously defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1) of the I.T Act. We find that the fine distinction between the said two defaults contemplated in Sec. 271(1)(c) viz. concealment of income and furnishing of inaccurate particulars of income had been appreciated at length by the Hon ble Supreme Court in its judgments passed in the case of Dilip Shroff Vs. Jt. CIT (2007) 210 CTR (SC) 228 and T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC) . The Hon ble Apex Court in its aforesaid judgments had observed that the two expressions, viz. concealment of particulars of income and furnishing of inaccurate particulars of income have different connotation. The Hon ble Apex Court being of the view that the non-striking off the irrelevant limb in the notice clearly reveals a nonapplication of mind by the A.O, had obs ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view had been taken by the Hon ble High Court of Bombay in the case of CIT Vs. Samson Perinchery (ITA No. 1154 of 2014; Dt. 05.01.2017)(Bom). 15. We find that as averred by the Ld. A.R., the indispensable obligation on the part of the A.O to clearly put the assessee to notice of the charge under the aforesaid statutory provision viz. Sec. 271(1)(c) had been deliberated upon by a coordinate bench of the Tribunal, i.e. ITAT C Bench, Mumbai in the case of M/s Orbit Enterprises Vs. ITO-15(2)(2), Mumbai (ITA No. 1596 1597/Mum/2014, dated 01.09.2017). The Tribunal in the aforementioned case had in the backdrop of various judicial pronouncements concluded that the failure to specify the charge in the Show cause notice clearly reflects the non application of mind by the A.O, and would resultantly render the order passed under Sec. 271(1)(c) in the backdrop of the said serious infirmity as invalid and void ab initio. 16. We have given a thoughtful consideration to the issue before us and after deliberating on the facts, are of the considered view, that the failure on the part of the A.O to clearly put the assessee to notice as regards the default for which penalty under S ..... X X X X Extracts X X X X X X X X Extracts X X X X
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