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TMI Blog2020 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice vague. So, even if the AO is of the opinion that action/omission of assessee attracts both the charges, then it was incumbent upon him, to put the assessee on notice by expressing his intention to proceed against the assessee for both charges by striking out or and substituting it with and which AO has failed to do in this case. AO by not bothering even to do the exercise as suggested by us reveals the mechanical approach of issuing penalty notice which action exposes the non-application of the mind on the part of the AO to put the assessee on clear notice for which he intends to levy penalty. Moreover, it has to be kept in mind that the assessment proceeding is distinct from the penalty proceedings and it is a settled ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d Ginning factory (2013) 359 ITR 565 which was followed by the decision of Hon ble Karnataka High court in the case of CIT vs. SSA s Emerald Meadows in ITA No.380 of 2015 dated 23.11.2015 which decision though has been challenged by the revenue before the Hon ble Supreme Court and the SLP has been dismissed. 3. However, the main grievance of the revenue is that in the present case the AO had found in the assessment order itself that assessee had faulted on both the charges i.e. having concealed particulars of income as well as furnished inaccurate particulars of such income. Therefore, according to revenue, there is difference in the facts of the case and the aforesaid case laws cannot be applied. Per contra, the ld. AR brought to o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what the assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on the part of the AO to put the assessee on clear notice for which he intends to levy penalty. Moreover, it has to be kept in mind that the assessment proceeding is distinct from the penalty proceedings and it is a settled law that imposition of penalty is discretionary and not mandatory. Therefore, any observation or finding made in the assessment order cannot come to the rescue of the AO s action of issuing defective/vague penalty notice. So, in the facts and circumstances discussed supra, the Misc. Application filed by the Revenue fails since we find no error leave alone error apparent on the face of the impugned order of the Tribunal. Therefore, Misc. Application of the revenue is dismissed. 3. In the result, the Misc. applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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