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TMI Blog2022 (4) TMI 178X X X X Extracts X X X X X X X X Extracts X X X X ..... n stands concluded in favour of the assessee and nothing contrary has been shown to us in the present facts which would warrant our taking a view different from Hon'ble Karnataka High Court in the case of S Chandrashekar Vs ACIT [ 2017 (2) TMI 1127 - KARNATAKA HIGH COURT] Since the provision of section 271(1)(c) is calamitous, albeit commercial, consequences, the provision is mandatory and brooks no trifling or dilution therewith, as a result we are of the considered view that, having regard to the fact that in the instant case the SCN dt 14/01/2015 issued u/s 274 r.w.s. 271(1)(c) of the Act without specifying any limb or charge, is invalid and untenable in the eyes of law, consequently the penalty imposed u/s 271(1)(c) of the Act is bad in law and hence quashed accordingly. - Decided in favour of assessee. - ITA No.: 106/BIL/2017 - - - Dated:- 1-4-2022 - Shri Ravish Sood, Judicial Member And Shri Jamlappa D. Battull, Accountant Member For the Assessee : Shri R. B. Doshi For the Revenue : Shri Gitesh Kumar ORDER The present appeal of the appellant assessee is assailed against the first appellate order of Commissioner of Income Tax-Appeals, Bilaspur [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue of notice u/s 143(2) and the assessments was culminated at ₹6,87,966/- by an order u/s 143(3) of the Act. Out of the total addition, an addition of ₹2,51,275/- u/s 69C was made on account of unaccounted purchases surrendered and wherefore the penalty proceedings u/s 271(1)(c) were initiated. 4.2 Ld. AO observing that, the aforesaid quantum order was unsuccessfully challenged by the assessee before the first appellate authority and in the absence of any record suggesting further appeal thereagainst, has concocted the acceptance of quantum by the assessee and by issue of letter dt 22/09/2014 u/s 271(1)(c) of the Act initiated the penalty proceedings and followed by a show cause notice [for short SCN ] dt 14/01/2015 u/s 274 r.w.s. 271(1)(c) of the Act. Not finding force in assessee s submission, the Ld. AO by an order imposed a penalty of at ₹40,239/- equal to 100% of tax sought to be evaded on the impugned addition u/s 69C. 4.3 Ld. CIT(A) echoing the views of assessing officer confirmed the penalty imposed by Ld AO and aggrieved thereby, the appellant assessee is before us with the grounds assailed at para 2 herein above. 5. During the course of hear ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of particulars of income and furnishing of inaccurate particulars of income referred into section 271(1)(c) of the Act signifies two distinct connotations, and the said proposition can be witnessed from the judgments of the Hon'ble Supreme Court in the case of Dilip N Shroff Vs JCIT reported at 291 ITR 519 (SC), and Ashok Paid Vs CIT reported at 292 ITR 11. In the light of aforesaid judicial precedents, it is imperative on the part of Ld. AO to make the assessee aware in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act as to which one of the two limbs is alleged against him for the purposes of imposition of penalty and unless it is made aware of any specific charge against him, the proceedings shall be violative of the principles of natural justice inasmuch as the assessee would not be in a position to put up his necessary defence appropriately. 7.2 One has to appreciate the point being canvassed by the assessee before us, which is based on the tone and drift of the notice issued u/s 274 r.w.s. 271(1)(c) of the Act dt 14/01/2015, a copy of which has been placed on record which de-facto reads as under; During the course of assessment proceedings u/s 143(3) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12/2012, the counsel himself accepted the above mistake and he offered to surrender the amount of ₹ 251275/- for addition in the hand of the assessee. Now decision is to be taken as whether the amount of ₹ 251275/- will be considered for unexplained investment u/s 69 or unexplained expenditure u/s-69C. Because the assessee had himself submitted that VAT of ₹ 10051/- is refundable means assets or in other word the refundable VAT is VAT Credit (purchase). Therefore, considering the above, I hereby add of ₹ 2,51,275/- in the hand of the assessee u/s-69C with initiating penalty proceeding u/s-271(1)(c) of Income Tax Act, 1961. (Emphasis Supplied) 7.6 In our considered opinion, the attempt of the Ld. DR to demonstrate application of mind by the Assessing Officer is of no defence, inasmuch as the Hon'ble Supreme Court has approved the factum of non-specifying relevant clause in the notice is reflective of non-application of mind by the Assessing Officer. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court in plethora of cases inter-alia CIT Vs Samson Pericherry , PCIT Vs Goa Dorado and PCI ..... X X X X Extracts X X X X X X X X Extracts X X X X
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