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TMI Blog2018 (5) TMI 1924X X X X Extracts X X X X X X X X Extracts X X X X ..... arge in the notice clearly reflects the non application of mind by the A.O, and would resultantly render the order passed under Sec. 271(1)(c) as invalid and void ab initio. We thus, without prejudice to our observations on non-maintainability of the penalty imposed by the A.O under Sec. 271(1)(c) on merits, also vacate the same for the reason that even otherwise as he had failed to strike off the irrelevant default in the SCN issued to the assessee, hence there is a clear absence of valid assumption of jurisdiction on his part. The order passed by the CIT(A) is set aside and penalty imposed under Sec. 271(1)(c) is vacated. - Decided in favour of assessee. - Shri G.S.Pannu, AM And Shri Ravish Sood, JM Appellant by: Shri Kisan Ghule, A.R R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i.e 30% of the share of the assessee in the total investment of ₹ 15,30,100/-) to the income of the assessee under Sec. 56(2)(vii)(b) of the Act in the year under consideration, viz. A.Y 2009-10. The A.O while framing the assessment also initiated penalty proceedings under Sec. 271(1)(c) of the Act and issued a Show cause notice, dated 31.12.2011 to the assessee. 3. Aggrieved, the assessee assailed the assessment order in appeal before the CIT(A). The CIT(A) being of the view that it was not a case of an outright transfer of any immovable property by Shri Amrik Singh A. Alag to the assessee, but a case where he had purchased the property and had made the payment for 30% share of the assessee, without requiring the assessee to reimbu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued by the A.O under Sec.274 r.w.s. 271 of the Act, it was not discernible as to for which default the assessee was called upon to explain as to why penalty under Sec.271(1)(c) may not be imposed on him. The ld. A.R taking us through the copy of the SCN at Page 38 of the Paper book of the assessee (for short APB ) submitted that the AO while issuing the notice had failed to strike off the irrelevant default, as a result whereof the assessee was not put to notice as regards the default for which he was being called upon to explain as to why penalty under the aforesaid statutory provision may not be imposed on him. Per contra, the ld. Departmental Representative (for short D.R ) relied on the orders of the lower authorities. 7. We have heard ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rds the default for which he was called upon to explain as to why penalty under Sec.271(1)(c) may not be imposed on him. We are of the considered view that the non striking off the irrelevant 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 reasonable opportunity of hearing to the assessee as contemplated under Sec. 274. We find that the distinction between the said two defaults 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), wherein the Hon ble Apex Court had concluded that the two expressions na ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rrelevant charge in the notice clearly reflects the non application of mind by the A.O, and would resultantly render the order passed under Sec. 271(1)(c) as invalid and void ab initio. We thus, without prejudice to our observations on non-maintainability of the penalty imposed by the A.O under Sec. 271(1)(c) on merits, also vacate the same for the reason that even otherwise as he had failed to strike off the irrelevant default in the SCN issued to the assessee, hence there is a clear absence of valid assumption of jurisdiction on his part. The order passed by the CIT(A) is set aside and penalty of ₹ 1,06,570/- imposed under Sec. 271(1)(c) is vacated. 9. The appeal of the assessee is allowed. Order pronounced in the open court on 30/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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