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TMI Blog2022 (1) TMI 645X X X X Extracts X X X X X X X X Extracts X X X X ..... fficer under Section 271(1)(c) of the Income Tax Act, 1961 (for short Act ) concerning Assessment Years 2009-10, 2010-11. Since the issues involved in all these cases are similar and interconnected, therefore, these appeals were heard together and are being disposed of by way of this common order. The following grounds raised in both the appeals are as under: ITA No. 5132/Del/2017 1. That the Ld. CIT (Appeal) has erred in upholding the penalty of ₹ 1,67,942/- imposed by the AO., invoking the provisions of Sec. 271(1)(c) of IT Act 1961. 2. That the Ld. CIT (Appeal) has erred in upholding the penalty of ₹ 1,67,942/-, without considering the facts and circumstances of the case and relying on irrelevant judicial pronouncements. 3. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. ITA No. 5133/Del/2017 1. That the Ld. CIT (Appeal) has erred in upholding the penalty of ₹ 3,58,595/- imposed by the AO., invoking the provisions of Sec. 271(1)(c) of IT Act 1961. 2. That the Ld. CIT (Appeal) has erred in upholding the penalty of ₹ 3,58,595/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce suffers from non application of mind and lack of satisfaction towards nature of default. It was further pointed out that the assessee belongs to Rockland Group of companies where the search was conducted on 06.09.2011, and in the identical set of facts, the penalty imposed u/s. 271(1)(c) was deleted in other group cases owning to similar defective notice. A reference was made to the decision of Co-ordinate Bench of Tribunal in Radhika Surgical Pvt. Ltd. vs. ACIT in ITAs No. 5090, 5091 and 5092/Del/2017 and M/s. Akhil Meditech Pvt. Ltd. in ITAs No. 5118, 5119, 5120 and 5121/Del/2017 where in the identical fact situation the penalty has been quashed. A further reference was made to the decision of the Hon'ble High Court in case of (i) PCIT vs. Sahara India Life Insurance Co. Ltd. as reported in 432 ITR 84 (Del.); (ii) CIT Anr. v. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Karn); (iii) Mohd. Farhan A. Shaikh vs. Dy. CIT [2021] 434 ITR 1 [Bom (FB)], for the proposition that notice issued under Section 274 r.w. Section 271(1)(c) of the Act is bad in law where it did not specify under which limb of Section 271(1)(c) of the Act, penalty proceedings had been initiated, i. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Search and seizure action u/s. 132(4) of the Income Tax Act, 1961 (hereafter referred to as the the Act ) was carried out in the Rockland group of cases on 06.09.2011. Subsequent to the search and seizure action, assessment proceedings were carried out u/s. 153C r.w.s. 143(3), by issue of notice dated 05.08.2013 to the appellant to file the return of income. In response, the assessee filed return of income on 10.09.2013, disclosing the total income as NIL. Subsequently, the assessee filed an application for settlement u/s. 245C of the Act before the Income Tax Settlement Commission in the capacity of a related person, related to the other assessee's of the Rockland group who had also filed settlement applications as specified person u/s. 245C(i) proviso (i). However, the assessee's application was rejected by the Income Tax Settlement Commission vide their order dated 23.04.2013, wherein the Commission held that the assessee does not qualify for admission as a person related to to the specified person . The assessee filed a writ petition before the Hon'ble Delhi High Court, challenging the rejection order of the Settlement Commission, but the petition was d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income in assessee's case. Besides this, the present case is relating to search conducted by the Revenue in the premises of the assessee, while the decision relied by the Assessing Officer as well as CIT(A) that of Hon'ble Supreme Court in case of Mak Data P. Ltd. vs. CIT 358 ITR 593 is relating to survey and there is no issue involved about the notice issued u/s. 271(1)(c) r.w.s. 274 of the Act. This case relied by the Revenue is not applicable in the present case due to the distinguishing facts. There is separate provision for penalty in search cases given under the statute after 01.07.2012 that of Section 271AAB of the Act which was totally ignored by the Assessing Officer. Thus, the penalty itself is based on incorrect Section. Therefore we are taking up the contention of the assessee that there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.p. 274 of the Act. This issue is squarely covered by the decision of the Hon'ble Supreme Court in case of M/s. SSA' Emerald Meadow. The extract of the decision of the Hon'ble Karnataka High Court in M/s. SSA' Emerald Meadows are as under which was confirmed by the Hon'ble Apex C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the Karnataka High Court in CIT v. Manjunatha Cotton Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises. Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. 9. Before us, no distinguishing feature in the facts of the case in the-year under consideration and that of earlier year has been pointed out by the Revenue. Further it has also n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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