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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 ..... i. A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Appellant : Shri Swaran Singh, C.A. For the Respondent : Shri Pankaj Sachan, D.R. ORDER PER A.D. JAIN, V.P.: This is assessee s appeal against the order of the ld. CIT(A) I, Kanpur, dated 24.1.2018 for Assessment Year 2014- 15, raising the following grounds of appeal: 1) 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, 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 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly, it was admitted. 4. The brief facts of the case are that the assessee is an individual and is engaged in the business of trading medicines for over 25 years. The assessee e-filed his return of income on 30.11.2014 disclosing an income of Rs.7,95,560/-. The Assessing Officer completed assessment under section 143(3) of the Income Tax Act, 1961, assessing the income of the assessee at Rs.11,97,480/- by making addition/disallowance. The Assessing Officer, thereafter, initiated penalty proceedings under section 271(1)(c) of the Act, by issuing a show cause notice 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 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n dismissed by the Hon'ble Supreme Court in 99 T xmann 152(SC). 7. Heard. The show-cause notice in question is as follows: 8. From a perusal of this notice, it is crystal clear that the charge for which penalty is proposed to be levied under section 271(1)(c) of the Act, whether for concealment of income, or for furnishing of inaccurate particulars of income, is not specific, inasmuch as the alleged charge reads: .have concealed the particulars of your income or furnished inaccurate particulars of such income . . The law mandates that the authority, who 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 assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Factory , (supra), it has been held by the Hon'ble Karnataka High Court that notice under section 274 read with section 271(1)(c) of the Act should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income, or for furnishing of inaccurate particulars of income; that sending printed form, where all the grounds are mentioned would not satisfy the requirement of law; that the assessee should know the grounds which he has to meet specifically, otherwise, the principles of natural justice are offended; that on the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... us of the assessee will not get discharged by furnishing an explanation without any further proof; that in Explanation-1 to section 271(1)(c), the onus is on the assessee; that where the AO issues a notice to the assessee, he makes the assessee aware that the provisions thereof are to be used against him and these provisions include Explanation-1 to section 271(1)(c); and that where the returned income is less than 80% of the assessed income, the Explanation is automatically attracted. In the case under consideration, however, the issue is not about the applicability or otherwise 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeals were listed for final hearing, this issue is sought to be raised. Thus on facts, we could safely conclude that even assuming that there was defect in the notice, it had caused no prejudice to the assessee and the assessee clearly understood what was the purport and import of notice issued under section 274 read with 271(1)(c) of the Act. Therefore, principles of natural justice cannot be read in abstract and the assessee, being a limited company, having wide network in various financial services, should definitely be precluded from raising such a plea at this belated stage. 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' ..... X X X X Extracts X X X X X X X X Extracts X X X X
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