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TMI Blog2021 (9) TMI 884X X X X Extracts X X X X X X X X Extracts X X X X ..... 98 & 101/MUM/2020 - - - Dated:- 1-9-2021 - Shri S.Rifaur Rahman (Accountant Member) And Shri Ravish Sood (Judicial Member) For the Assessee : Shri Vijay Mehta, A.R For the Revenue : Shri Usha Gaikwad, D.R ORDER PER BENCH: The captioned appeals filed by the assessee are directed against the respective orders passed by the CIT(A)-29, Mumbai, dated 28.10.2019 for A.Y. 1997-98, A.Y. 2006-07 and A.Y. 2007-08. As a common issue is involved in the aforesaid appeals, therefore, the same are being taken up and disposed off together by way of a consolidated order. We shall first take up the appeal of the assessee for A.Y. 1997-98 in ITA No. 97/Mum/2020. The assessee has assailed the impugned order on the following grounds before us: 1. The learned Jt. Commissioner of Income Tax erred in levying penalty proceedings u/s 271(1)(c). 2. The appellant craves leave to add, alter, vary omit, substitute or amend the above ground of appeal, at any time before or at, the time of hearing , of the appeal, so as to enable to decide the appeals according to law. The appellant craves leave to add, amend or alter the grounds of appeal at or before the t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the Show cause notice (hereinafter referred to as SCN ) issued u/s 274 r.w.s 271 of the Act, dated 23.01.2015, therefore, the penalty which was thereafter imposed by him u/s 271(1)(c) of the Act cannot be sustained and is liable to be vacated. In order to drive home his aforesaid contention the ld. A.R had drawn our attention to the copy of the SCN , dated 25.01.2015 that was placed on our record. In order to buttress his aforesaid claim that the failure on the part of the A.O to strike off the irrelevant default in the SCN on the basis of which penalty u/s 271(1)(c) is imposed would vitiate the penalty proceedings, the ld. A.R had placed reliance on the recent full bench judgment of the Hon ble High Court of Bombay in the case of Mohd. Farhan A. Shaikh Vs. Dy. Commissioner of Income Tax, Central Circle 1, Belgaum (2021) 125 taxman.com 253 (Bom) (copy placed on record). Our attention was drawn by the ld. A.R to the aforesaid judicial pronouncement wherein it was held by the Hon ble High Court that where the assessment order though clearly recorded satisfaction for imposing penalty on one or other, or both grounds mentioned in Sec. 271(1)(c) of the Act, a mere defect in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the A.O to have clearly put the assessee to notice as regards the default for which he was called upon to explain as to why penalty under Sec. 271(1)(c) may not be imposed on him. As observed by us hereinabove, a perusal of the Show cause notice issued in the present case by the A.O under Sec. 274 r.w. Sec. 271(1)(c), dated 23.01.2015 clearly reveals that there has been no application of mind on the part of the A.O while issuing the same. We are of a strong conviction that the very purpose of affording a reasonable opportunity of being heard to the assessee as per the mandate of Sec. 274(1) would not only be frustrated but would be rendered as redundant and purposeless if, the assessee is not conveyed in clear terms by the A.O the specific default for which penalty under the said statutory provision is sought to be imposed. In our considered view the indispensable requirement on the part of the A.O to put the assessee to notice as regards the specific charge contemplated under the aforesaid statutory provision viz. concealment of income or furnishing of inaccurate particulars of income is not merely an idle formality but is a statutory obligation cast upon him, which we are a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from nonapplication of mind. It was also bound to comply with the principles of natural justice [See Malabar Industrial Co. Ltd. Vs. CIT (2000) 2 SCC 718]. We are of the considered view, that now when as per the settled position of law the two defaults viz. concealment of income and furnishing of inaccurate particulars of income are separate and distinct defaults, therefore, in case the A.O sought to have proceeded against the assessee for either of the said defaults, then, it was incumbent on his part to have clearly specified his said intention in the Show cause notice, which we find he had failed to do in the case before us. The aforesaid failure on the part of the assessee cannot be dubbed as merely a technical default as the same has clearly divested the assessee of his statutory right of an opportunity of being heard and defend his case. 10. We find that the Hon ble High Court of Karnataka in the case of CIT Vs. SSA s Emerald Meadows (73 taxmann.com 241)(Kar) following its earlier order in the case of CIT Vs. Manjunatha Cotton and Ginning Factory (2013) 359 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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