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TMI Blog2022 (8) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 271(1 )(c) of the Income Tax Act, 1961, without seeking assessment records in an ex-party manner. 2) That the Ld. C.I.T. (Appeals)-I, Kanpur has passed the order on ex-parte manner and without providing reasonable opportunity of being heard to the appellant. 3) That the Ld. Commissioner of Income Tax (Appeals)-I, Kanpur has erred in law and on facts by sustaining the Penalty amounting to Rs.84,297/- imposed by the Ld. A.O. under section 271(1)(c) of the Income Tax Act, 1961. 4) That the Ld. C.I.T(Appeals)-I, Kanpur has erred in law and on facts by sustaining the Penalty amounting to Rs.84,297/- imposed by the Ld. A.O. under section 271(1)(c) of the Income Tax Act, 1961, which is wholly unjustified, without proper basis, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tice dated 03.06.2016, proposing the penalty to be levied and, thereafter, imposed a penalty of Rs.84,297/-, vide his order dated 09.11.2016. Aggrieved, the assessee preferred an appeal before the ld. CIT(A), who, vide his impugned order, confirmed the order of the Assessing Officer, levying a penalty of Rs.84,297/-. 5. The ld. Counsel for the assessee submitted that the Assessing Officer did not specify the charge and the limb under which the penalty is levied. The ld. A.R. of the assessee vehemently argued that it is a settled position of law that if the notice under section 274 is not specific about the charge or limb under which penalty is being levied under section 271(1)(c) of the Act, any penalty levied on the basis of such a notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o is proposing to impose penalty, shall be certain as to the basis on which the penalty is being levied and the notice must reflect that specific reason, so that the assessee, to whom such notice is given, can prepare himself regarding the defence, which he would like to take to support his case. This is even enshrined in the principles of natural justice and as has been upheld by the Hon'ble Apex Court and various High Courts. 9. In 'CIT vs. SSA's Emerald Meadows', [2016] 73 Taxmann.com 248, the Hon'ble Apex Court looked into the facts before them that the Tribunal, relying on the decision of the Division Bench of the Hon'ble Karnataka High Court, in the case of 'CIT and Another vs. Manjunath Cotton & Ginning Factory', 239 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... basis of such proceedings, no penalty could be imposed on the assessee; that penalty proceedings are distinct from assessment proceedings; and that they emanate from the assessment proceedings, still they are separate and independent proceedings all together. 11. In 'Meherjee Cassinath Holdings Pvt. Ltd vs. ACIT' (ITAT Mumbai), ITA No. 2555/MUM/2012, order dated 28/04/2017, the observation of the Bench was that penalty proceedings under section 271(1)(c) of the Act are "quasi-criminal" proceedings and ought to comply with the principles of natural justice; and that the non-striking off of the irrelevant portion in the show-cause notice means that the Assessing Officer is not firm about the charge against the assessee and the assessee is no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Explanation-1 to section 271(1)(c). Rather, the issue is regarding the validity and legality of the penalty notice. It cannot be gainsaid that it is only when the notice issued is a valid notice, that the question of considering the assessee's explanation/reply in the light of Explanation -1 would arise. 14. In 'M/s Sundaram Finance Ltd. vs. ACIT' (supra), the judgment of the Hon'ble Madras High Court, on which reliance has been placed by the ld. D.R., their Lordships, dismissing the appeal of the assessee, held as under: "16. We have perused the notices and we find that the relevant columns have been marked, more particularly, when the case against the assessee is that they have concealed particulars of income and furnished inacc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15. It is seen that the Hon'ble Madras High Court in 'M/s Sundaram Finance Ltd. vs. ACIT' (supra) nowhere disagreed with the view taken by the Hon'ble Karnataka High Court in 'CIT and Another vs. Manjunath Cotton & Ginning Factory' (supra). Rather, the matter was decided on the facts of the case, holding, inter alia, that the case of the Revenue against the assessee was that of concealment of income as well as that of furnishing of inaccurate particulars of income. Therefore, 'Sundaram Finance' (supra) is of no aid to the Revenue. 16. Moreover, in the present case, as against that in 'M/s Sundaram Finance Ltd. vs. ACIT' (supra), this issue had been raised by the assessee before the ld. CIT(A), and it has also been raised b ..... X X X X Extracts X X X X X X X X Extracts X X X X
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