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TMI Blog2022 (10) TMI 30X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars of income. In the case of Manjunatha Cotton Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] observed where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court also held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. The penalty provisions of section 271(1)(c) of the Act are attracted, where the Assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for ascertaining the revenue was based on expected estimate and the project was completed in the current year. The Assessing Officer however found that the project expenditure of Rs.78,40,58,041/- includesthe expenditure of Rs.35,34,96,000/- which yet to be incurred. Therefore, the Assessee was asked to explain details of such estimate of expenses. The Assessee voluntarily surrendered the loss claimed in its return of income and consequently, the Assessing Officer disallowed the said loss of Rs.12,83,96,466/-. 2.1. The Assessing Officer also made an addition of Rs.3,02,436/- on the ground that from the perusal of the details of trade payables of Rs.3,89,61,695/- submitted by the Assessee vide its letter dated 01.01.2015, the trade payab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36/-. 3. Being aggrieved with the levy of penalty, the Assesseepreferred first appeal before the ld. Commissioner, who vide impugned order, dismissed the appeal of the Assessee by affirming the levy of penalty of Rs.4,36,41,959/- u/s. 271(1)(c) of the Act. 4. Being aggrievedwith the impugned order, the Assessee is in appeal before us. 5. We have heard the parties and perused the material available on record. Though the Assessee and the Ld. DR argued the matter on merit as well, however the Ld. AR emphasized that in the instant case, the notice dated 14.03.2015 (copy filed on record)issued u/s 274 read with 271(1)(c) of the Act by the AO is vague, having not specified any particular limb of the penalty and, therefore, the pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessee. Operative part of the judgment in case of M/s. SSA's Emerald Meadows (supra) decided by Hon'ble High Court of Karnataka is reproduced below:- 2. This appeal has been filed raising the following substantial questions of law: (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2 Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in. holding that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court, the appeal is accordingly dismissed. 7.3 The Hon'ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory, 359 ITR 565 (Kar) observed where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court also held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. 7.4 Even the Hon ble High Court of Delhi in the case of M/s. Sahara India Life Insurance Company Ltd. 432 ITR 84 (Del.) while following the cases referred ab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eanings. Therefore, it is imperative for the Assessing Officer to specify the relevant limb so as to make the Assessee aware, as to what is the charge made against him so that he can respond accordingly. 7.6 In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued the notices referredto above under section 274 r.w.s. 271(1)(c) of the Act, without specifying the limb, under which the penalty proceeding has been initiated and proceeded with, apparently goes to prove that notice in this case has been issued in a stereotyped manner without applying mind which is bad in law, hence can not be considered valid notice sufficient to impose penalty u/s 271(1)(c) of the Act and t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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