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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 ..... who had upheld the same. The penalty imposed by the A.O u/s 271(1)(c) is quashed - Decided in favour of assessee. - ITA No. 41/RPR/2018 - - - Dated:- 29-4-2022 - Shri Ravish Sood, Judicial Member And Shri Jamlappa D Battull, Accountant Member For the Assessee : Shri R.B Doshi, AR For the Revenue : Shri G.N Singh, DR ORDER PER RAVISH SOOD, JM: The present appeal filed by the assessee is directed against the order passed by the CIT(Appeals)-1, Raipur dated 24.01.2018, which in turn arises from the order passed by the A.O under Sec. 271(1)(c) of the Income Tax Act, 1961 (for short the Act ) dated 26.03.2013 for assessment year 2008-09. Before us the assessee has assailed the impugned order on the following grounds of appeal: 1. In the facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the penalty of Rs.3,13,172/- imposed by the AO u/s.271(1)(c). The penalty imposed by the AO and confirmed by the CIT(A) is not justified. 2. Ld. CIT(A) erred in not adjudicating upon Ground No.3 of appeal raised by the appellant, relating to the penalty order being barred by limitation. He erred in dismissing the ground. The penalty ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come by the assessee. 6. Aggrieved, the assessee assailing the penalty imposed by the Assessing Officer u/s.271(1)(c) of the Act carried the matter in appeal before the CIT(Appeals) but without any success. 7. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 8. Before us, the Ld. Authorized Representative ( for short AR ) for the assessee has assailed the validity of jurisdiction that was assumed by the Assessing Officer for imposing penalty u/s.271(1)(c) of the Act. Elaborating on his aforesaid contention, it was submitted by the Ld. AR that as the Assessing Officer had failed to validly put the assessee to notice as regards impugned default for which penalty u/s.271(1)(c) of the Act was sought to be imposed upon him, therefore, penalty u/s.271(1)(c) of the Act imposed by him could not be sustained and was liable to be quashed on the said count itself. In order to buttress his aforesaid contention, the Ld. AR had taken us through the copy of Show Cause Notices (SCN) which was issued by the Assessing Officer u/s.274 r.w.s. 271(1)(c) of the Act dated 27.12.2010, at Page No. 14 of APB. Adverting to the contents of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble to be imposed on him. It was, thus, claimed by the Ld. DR that penalty imposed by the Assessing Officer u/s.271(1)(c) of the Act had rightly been upheld by the CIT(Appeals). 10. We have heard the ld. authorized representatives for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Admittedly, on a perusal of the SCN , dated 27.12.2010, it transpires that the Assessing Officer had failed to point out the default qua which the assessee was called upon to explain as to why it may not be saddled with penalty u/s 271(1)(c) of the Act. 11. After having given a thoughtful consideration to the facts of the case, we are persuaded to subscribe to the claim of the Ld. AR that the A.O had in the aforesaid SCN , dated 27.12.2010 failed to point out the default for which penalty was sought to be imposed by him on the assessee company. In our considered view, as both of the two defaults envisaged in Sec. 271(1)(c), i.e, concealment of income and furnishing of inaccurate particulars of income are s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... defaults contemplated in Sec. 271(1)(c), viz. concealment of income and furnishing of inaccurate particulars of income had been appreciated at length by the Hon ble Supreme Court in its judgments passed in the case of Dilip N Shroff Vs. Jt. CIT (2007) 210 CTR (SC) 228 and T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC). The Hon ble Apex Court in its aforesaid judgments, had observed, that the two expressions, viz. concealment of particulars of income and furnishing of inaccurate particulars of income have different connotation. The Hon ble Apex Court being of the view that the failure to clearly specify the default in the Show Cause notice clearly reveals a non-application of mind by the A.O, had observed as under:- 83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he has furnished inaccurate particulars. Even before us, the learned Additional ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... TA No. 1596 1597/Mum/2014, dated 01.09.2017. The Tribunal in the aforementioned case had after considering the various judicial pronouncements, concluded, that the failure to specify the charge in the Show cause notice clearly reflects the non-application of mind by the A.O and would render the order passed by him under Sec. 271(1)(c) in the backdrop of the said serious infirmity as invalid and void ab initio. 15. We have given a thoughtful consideration to the issue before us and after deliberating on the facts, are of the considered view, that the failure on the part of the A.O to clearly put the assessee to notice as regards the default for which penalty under Sec. 271(1)(c) was sought to be imposed on him by specifying the default in the SCN , dated 27.12.2010, had left the assessee guessing of the default for which he was being proceeded against. In the backdrop of our aforesaid observations, we are of a strong conviction, that as the A.O had clearly failed to discharge his statutory obligation of fairly putting the assessee to notice as regards the default for which he was being proceeded against, therefore, the penalty under Sec. 271(1)(c) of Rs.3,13,172/- imposed by ..... X X X X Extracts X X X X X X X X Extracts X X X X
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