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TMI Blog2021 (2) TMI 1030X X X X Extracts X X X X X X X X Extracts X X X X ..... tory, CIT vs. SSA s Emerala Meadows [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] and Pr. CIT vs. Sahara India Life Insurance Company Ltd. [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act the same has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Even otherwise, when the assessee has duly produced balance sheet and profit loss account before the AO during the assessment proceedings and the income computed in the profit loss account has been accepted and at the same time, it is nowhere the case of the Revenue that assessee has furnished false information or has not furnished necessary information. So, mere mistake, claimed to be inadvertent by the assessee, is not a concealment of income by furnishing of inaccurate particulars in the facts and circumstances of the case, when the assessee has filed revised computation of book profit claiming correct figures acceptable to the Revenue. So far as question of filing the revised return only after issuance of notice u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t by the long term capital gains was filed after issuance of notice under section 143(2) of the Act did not take away bonafide and voluntary declaration of the correct income without any detection by the Department. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment order dated 27.10.2010 framed u/s 143 (3) of the Income-tax Act, 1961 (for short the Act ), penalty proceedings have been initiated against the assessee for filing inaccurate particulars of income. Assessee filed original return of income on 30.09.2008 declaring an income of ₹ 16,541/- under the normal provisions of the Act and ₹ 27,745/- u/s 115JB of the Act. On issuance of the notice u/s 143(2) of the Act, assessee filed revised return of income u/s 139 (5) of the Act increasing the taxable book profit u/s 115JB of the Act to ₹ 4,79,31,031/-. Whereas in the original return income long term capital gain exempt u/s 10 (38) of the Act was excludible while computing the taxable book profit. Declining the contentions raised by the assessee that due to bonafide and inadvertent error, exempt income u/s 10(38) of the Act has been reduced b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and relied upon the order passed by the ld. CIT (A). 7. In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower authorities and arguments addressed by the authorized representatives of both the parties to the appeal, the sole question arises for determination in this case is:- as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings? 8. Undisputedly, in the original return of income, assessee has disclosed all the true and full particulars relating to sale of shares and long term capital gains. It is also not in dispute that in the original return, assessee has claimed deduction of long term capital gains of ₹ 4,79,03,286/- in computing book profit u/s 115JB of the Act. It is also not in dispute that in the revised return filed after issuance of notice u/s 143 (2) of the Act, assessee has computed the book profit of ₹ 4,79,03,286/-. 9. It is the case of the AO that assessee by not including long term capital gain in the book profit in the return of income has furnished inaccurate particulars of income. But, on the other hand, as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty proceedings either for concealment of particulars of income or furnishing of inaccurate particulars of such income by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. 13. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tent by the assessee, is not a concealment of income by furnishing of inaccurate particulars in the facts and circumstances of the case, when the assessee has filed revised computation of book profit claiming correct figures acceptable to the Revenue. So far as question of filing the revised return only after issuance of notice u/s 143 (2) of the Act to the assessee is concerned, it is again undisputed fact that with the notice u/s 143(2), no questionnaire was issued pointing out wrongly computing the book profit, leading to the reasonable inference that the mistake was inadvertent on the part of assessee. 18. Coordinate Bench of the Tribunal in case of ITO vs. Sitashri Trading Finance Pvt. Ltd. (supra) decided the identical issue in favour of the assessee by following the decision rendered by Hon ble Allahabad High Court in CIT vs. Jindal Polyester Steel Ltd. 365 ITR 225 (All.) by returning following findings :- 9. The main thrust of DR's contention is that it was only when the assessee was cornered by issuing notice u/s. 143(2) dated 11.12.2013 that the assessee filed the revised computation of book profit. In this context, it is significant to note that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e reasons disclosed above, penalty could not have been imposed even in respect of the false claim of depreciation made by the assessee. Cl T v. Gold Coin Health Food (P) Ltd. [2008] 304 ITR 308 (SC) ; [2008] 218 CTR (SC) 359 ; [2008] 11 DTR (SC) 185 distinguished. 15. On the facts and circumstances we are of the view that the issue involved is squarely covered by Division Bench Decision of this court in the case of Aleo Manali Hydro Power (P) Ltd. (supra). 16. The book profit disclosed by the assessee for the purpose of the liability of tax under section 115J is relevant and not the income determined under the provisions of the Income-tax Act. 17. The Tribunal, on the facts and circumstances of the case, has further recorded the finding that, on the facts and in the circumstances of the case and on the bona fide of the explanation given by the assessee and the disclosure made in the accounts accompanying the return, no penalty is leviable. 19. In view of what has been discussed and following the decisions rendered by Hon ble Supreme Court, Hon ble High Court and coordinate Bench of the Tribunal discussed in the preceding paras, we are of the considered v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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