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TMI Blog2020 (3) TMI 280X X X X Extracts X X X X X X X X Extracts X X X X ..... gh Courts. We hold that the show cause notice, which has not specified the charge and limb under which the penalty is proposed to be levied, is void ab initio and the consequent penalty imposed on the basis of such notice is, therefore, illegal and bad in law and liable to be deleted. - Decided in favour of assessee - ITA No.606/LKW/2018 - - - Dated:- 23-1-2020 - Shri. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri Rakesh Garg, Advocate For the Respondent : Shri Ajay Kumar, D.R. ORDER PER A. D. JAIN, V.P.: This is assessee s appeal against the order of the ld. CIT(A)-I, Kanpur, dated 13/6/2018 for assessment year 2014-15, taking the following grounds: 1. Becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d our attention to the show cause notice dated 8/12/2016 for levy of penalty under section 271(1)(c) of the Act. It was submitted that from a perusal of this notice, it is crystal clear that the charge, for which the penalty is proposed to be levied under section 271(1)(c) of the Act, is not specific, as to whether it is for concealment of income or for furnishing of inaccurate particulars of income. The ld. A.R. of the assessee vehemently argued that it is a settled position of law that if the notice under section 274 is not specific about the charge or limb under which penalty is being levied under section 271(1)(c) of the Act, any penalty levied on the basis of such a notice is bad in law and it is liable to be cancelled. 4. The ld ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessment order, the Assessing Officer has observed as follows, in this regard: Penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 is being initiated against the assessee in assessment year 2014-15 separately for concealment of particulars of income or furnishing inaccurate particulars of income. Thus, even in the assessment order, the specific charge for the proposed levy of penalty has not been delineated. 7. In 'CIT vs. SSA's Emerald Meadows', [2016] 73 Taxmann.com 248, the Hon'ble Apex Court looked into the facts before them that Tribunal relying on the decision of the Division Bench of the Hon'ble Karnataka High Court in the case of CIT and Another vs. Manjunath Cotton Ginning Fact ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffended. On the basis of such proceedings, no penalty could be imposed to the assessee. Penalty proceedings are distinct from assessment proceedings, though it emanates from the assessment proceedings; still it is separate and independent proceedings all together. 9. In 'Meherjee Cassinath Holdings Pvt. Ltd vs. ACIT (ITAT Mumbai)', ITA No. 2555/MUM/2012, order dated 28/04/2017, the observation of the Bench was that penalty proceedings under section 271(1)(c) of the Act are quasi-criminal proceedings and ought to comply with the principles of natural justice. The non-striking of the irrelevant portion in the show-cause notice means that the Assessing Officer is not firm about the charge against the assessee and the assessee is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t matter. This was never the plea of the assessee either before the Assessing Officer or before the first Appellate Authority or before the Tribunal or before this Court when the Tax Case Appeals were filed and it was only after 10 years, when the appeals were listed for final hearing, this issue is sought to be raised. Thus on facts, we could safely conclude that even assuming that there was defect in the notice, it had caused no prejudice to the assessee and the assessee clearly understood what was the purport and import of notice issued under section 274 r/w. section 271 of the Act. Therefore, principles of natural justice cannot be read in abstract and the assessee, being a limited company, having wide network in various financial servi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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