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TMI Blog2019 (10) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) is the only issue raised by the assessee in the grounds of appeal. 3. Facts of the case, in brief, are that the assessee is an HUF and filed the return of income on 29.07.2014 declaring total income of ₹ 12,47,740/-. The Assessing Officer completed the assessment u/s.143(3) on 23.12.2016 determining the total income at ₹ 18,57,743/- wherein he made addition of ₹ 18,57,743/- u/s. 68 r.w.s. 115 BBE of the IT Act on account of sale of shares of M/s.CCL International Limited which were purchased at a cost of ₹ 6,10,000/- but sold at ₹ 18,57,743/- within a period of 8 months from the date of purchase and on which concessional rate of tax was claimed. The Assessing Officer thereafter initiated penalty proceedings u/s. 271 (1) (c) of the IT Act. Rejecting the various explanation given by the assessee and relying on various decisions the Assessing Officer levied penalty of ₹ 3,59,591/- u/s. 271 (1) (c) of the IT Act. being 100% of the tax sought to be evaded. In appeal the Ld. CIT(A) sustained the penalty so levied by the Assessing Officer. 4. Aggrieved with such order of the CIT(A), the assessee is in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Assessing Officer at the time of initiation of penalty proceedings, which is jurisdictional notice, shows that it is not clear as to under which limb of the provisions the penalty has been levied. Relying on various decisions including the decision of Hon ble Karnataka High Court in the case of CIT Vs. M/s. Manjunath Cotton Ginning reported in 359 ITR 565 and in the case of CIT Vs. M/s. SSA s Emerald reported in (2016) 73 taxman.com 241, he submitted that the penalty so levied was held to be not valid when the inappropriate words in the notice were not stuck off. He submitted that the SLP filed by the revenue against the order of the Hon ble Karnataka High Court has been dismissed by the Hon ble Supreme Court. Referring to the decision of the coordinate bench of the Tribunal in the case of the sister concern namely Shobhit Gupta (HUF) Vs. ITO vide ITA No.6765/Del/2018 order dated 03.04.2019 he submitted that under identical circumstances the Tribunal has cancelled the penalty so levied by the Assessing Officer and sustained by the CIT(A). He accordingly submitted that this being a covered matter in favour of the assessee the penalty so levied and sustained by the CIT(A) is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e submission of the Counsel for the assessee that the notice issued u/s. 274 r.w.s. 271 (1) (c) of the IT Act does not specify the exact charge for which penalty has been levied. The copy of the notice issued u/s. 274 r.w.s. 271 (1) (c) of the IT Act 1961 dated 23.12.2016 reads as under :- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. To, M/s Subhash Chand Gupta and Sons (IIUF) 43/1, Rajpur Road Civil Lines, Delhi-110054 PAN: AABHS2009G Whereas in the course of proceedings before me for the assessment year 2014-15 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 14.09.2016. *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 11:30 A.M. on 23.01.2017 and show cause why an order imposing a penalty on you should not be made under sect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Sect ion 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Sect ion 271( l ) (c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Sect ion 271( l ) (c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. .The Tribunal, while allowing the appeal of the assessee, has relied 01 the derision of the Division Bench of this Court rendered In the case of COMMISSIONER or INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. According to the Hon'ble Supreme Court, in such a situation, levy of penalty suffers from non-application of mind. In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(l)(c) of the Act dated 23.12.2016 without striking off the irrelevant words, the penalty proceedings show anon-application of mind by the Assessing Officer and is, thus, unsustainable. 10. The facts of the present appeal are identical to the facts of the case before the Hon'ble Karnataka High Court in the case of SSA's. Emarld Meadows (supra). In the instant case the AO in the notice issue u/s 274 read with section 271(l)(c ) of the Act has not specified as to whether the assessee has furnished inaccurate particulars of his income or concealed his income. Hence, respectfully following the quoted decision of Hon ble Karnataka High Court, we cancel the order of the Assessing Officer dated 28.06.2017 levying penalty of ₹ 3,63,590/- and allow the ground of appeal of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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