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TMI Blog2019 (9) TMI 682X X X X Extracts X X X X X X X X Extracts X X X X ..... while deciding the identical issue held that when the AO has failed to issue a specific show-cause notice to the assessee as required u/s 274 read with section 271(l)(c), penalty levied is not sustainable. Thus when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Also see M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] - Decided in favour of assessee - ITA No.597/Del./2016 - - - Dated:- 13-9-2019 - Shri Kuldip Singh, Judicial Member And Shri Prashant Maharishi, Accountant Member For the ASSESSEE : Shri Karan Kumar, CA For the REVENUE : Ms. Naina Soin Kapil, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, M/s. Sudhir Transformers Ltd. (hereinafter referred to as the assessee ) by filing the present appeal sought to set aside the impugned order dated 01.02.2015 passed by the Commissioner of Income-tax (Appeals)-23, New Delhi affirming the penalty order dated 18.03.2014 passed u/s 271(1)(c) of the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of late payment of Karnataka Sales-tax was confirmed, initiated the penalty proceedings u/s 271(1)(c) of the Act. Declining the contentions raised by the assessee that the issue in question is qua inadvertent claim of u/s 43B of the Act by the assessee in which penalty proceedings u/s 271(1)(c) were not attracted, AO proceeded to levy the penalty to the tune of ₹ 94,250/- by making following computation :- Concealed income (773635+240750) : ₹ 2,57,569/- Tax sought to be evaded : ₹ 94,252/- Minimum penalty @ 100% : ₹ 94,252/- Maximum Penalty @ 300% : ₹ 2,82,756/- 3. Assessee carried the matter by way of an appeal before the ld. CIT (A) who has confirmed the penalty by dismissing the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of proceedings before me for the assessment year 2005-06 it appears to me that you:- Have without reasonable cause failed to comply with a notice under section 142(1)/143(2) of the Income Tax Act, 1961 dated Have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1, 2,3,4 and 5. You are hereby requested to appear before me at 10.30 AM/PM on 20.01.2012 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representatives you may show cause in writing on or before the said date which will be considers before any such order is made under section 271. Sd/- Asstt. Commissioner of Income Tax Central Circle 25, New Delhi. 9. Bare perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x liability. As said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 11. Hon ble Apex Court in case of CIT vs. SSA s Emerala Meadows - (2016) 73 taxmann.com 248 (SC) while dismissing the SLP filed by the Revenue quashing the penalty by the Tribunal as well as Hon ble High Court on ground of unspecified notice has held as under:- Section 274, read with section 271(1)(c), of the Income-tax Act, 1961 - Penalty - Procedure for imposition of (Conditions precedent) - Assessment year 2009-10 - Tribunal, relying on decision of Division Bench of Karnataka High Court rendered in case of CIT v. Manjunatha Cotton Ginning Factory [2013] 359 1TR 565/218 Taxman 423/35 taxmann.com 250, allowed appeal of assessee holding that notice issued by Assessing Officer under section 274 read with section 271 (1 )(c) was bad in law, as it did not specify under which limb of section 271 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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