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TMI Blog2020 (2) TMI 115X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income or furnishing inaccurate particulars of such income penalty proceedings have been initiated rather written vague and ambiguous satisfaction by recording that, penalty proceedings u/s 271(1)(c) are initiated . So, very initiating penalty proceedings on the basis of vague and ambiguous satisfaction rather no satisfaction are bad in law and as such not sustainable. Not only this even at the time of initiating the penalty proceedings the Assessing Officer was not aware enough as to whether he is initiating the penalty proceedings for concealment of particulars of income or for furnishing inaccurate particulars of income rather sought to initiate the penalty against the assessee We are of the considered view that when at the time of initiating penalty proceedings Assessing Officer was not aware as to under which of the limb of Section 271(1)(c) he is intiating the penalty proceedings subsequent proceedings u/s 271(1)(c) are futile exercise making levy of penalty is not sustainable in the eye of law - Decided in favour of assessee. - ITA No.6472/Del./2016, ITA No.6473/Del./2016 - - - Dated:- 29-1-2020 - Shri Kuldip Singh, Judicial Member And Dr. B.R. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 respectively, the penalty proceedings were initiated u/s 271(1)(c) of the Act. Declining the contention raised by the assessee, Assessing Officer levied the penalty to the tune of ₹ 57,098/- and 2,03,388/- @ 100% of the tax sought to be evaded for A.Y. 2009-10 and 2010- 11 respectively. 4. 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. 5. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 6. Undisputedly addition has been made in this case on account of disallowance of credit card expenses claimed by the assessee as well as on account of failure of the assessee to explain the source of acquisition of the jewellery. It is also not in dispute that identically worded notices u/s 274 read with section 271(1)(C) have been issued to initiate the penalty proceedings to both the assessee in aforesaid appeals on the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Income - tax Act, 1961. * have concealed the particulars of your Income or . Furnished inaccurate particulars of such Income. You are hereby requested to appear before me on 28 . 04.2014 at 11 AM in my office at Room No. 332, E-2, ARA Centre, Jhandewalan Extension, New Delhi- 110055 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 representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271. Yours faithfully, Sd/- (Indu Bala Saini) Assistant Commissioner of Income Tax, Central Circle-13, New Delhi 10. Bare perusal of the notices 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 go to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for concealment of particulars of income or furnishing of inacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y. 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 assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it shou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. Hon ble Apex Court in case of CIT vs. SSA s Emerald 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 - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by revenue, same wa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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