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TMI Blog2022 (5) TMI 225X X X X Extracts X X X X X X X X Extracts X X X X ..... being barred by limitation. He erred in dismissing the ground. The penalty order passed by the AO is barred by limitation. 3. Without prejudice to ground No.1 and 2, the CIT(A) erred in confirming the penalty u/s.271(1)(c) inasmuch as the show cause notice issued by AO is invalid and it has been passed without complying with mandatory requirements of law. 4. The appellant reserves the right to add, amend or alter any of the ground/s of appeal." 2. Succinctly stated, the assessee had filed his return of income for the assessment year 2008-09 on 27.03.2009, declaring an income of Rs.1,40,170/-. Subsequently, the case of the assessee was selected for scrutiny assessment u/s.143(2) of the Act. 3. Original assessment was framed by the Assessing Officer u/s.143(3) of the Act, dated 27.12.2018 wherein the income of the assessee was determined at Rs.28,27,050/- after making the following additions: Sl. No. Particulars Amount 1. Addition towards LTCG on sale of property Rs.15,86,877/- 2. Addition towards unexplained cash balance Rs.11,00,000/- At the time of culminating the assessment proceedings the Assessing Officer had initiated penalty proceedings u/s.271(1)(c) of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ff irrelevant default i.e 'concealment of particulars of income' or 'furnishing of inaccurate particulars of income', therefore, the assessee remained divested of an opportunity of putting forth his case that no penalty under the said statutory provision was liable to be imposed upon him. It was submitted by the Ld. AR that the aforesaid 'SNC" dated 27.12.2010 was followed by two reminder letters of the Assessing Officer dated 03.05.2012 & 15.03.2013 Page No.(s) 15 & 16 of APB, however, in the said two letters too there was no mention of the default for which the impugned penalty u/s.271(1)(c) of the Act was sought to be imposed. Also, it was submitted by the Ld. AR that not only the Assessing Officer had failed to point out the default for which impugned penalty was sought to be imposed on the assessee but even otherwise the said penalty had been imposed for both 'concealment of particulars of income' and 'furnishing of inaccurate particulars'. In order to fortify his claim the Ld. AR had taken us through the order passed by the Assessing Officer u/s.271(1)(c) of the Act, dated 26.03.2013. Backed by the aforesaid facts, it was submitted by the Ld. AR that the Assessing Officer had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tory on the part of 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 27.12.2010 clearly reveals that there was 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 if an assessee is not conveyed in clear terms the specific default for which penalty was sought to be imposed on him. 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 find had not been discharged in the present ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 merely be dubbed as a technical default because the same had clearly divested the assessee of his statutory right of being heard and defend his case. 13. 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 ITR 565 (Kar), had held, that where the notice issued by the A.O un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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