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TMI Blog2023 (2) TMI 251X X X X Extracts X X X X X X X X Extracts X X X X ..... KA 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. Thus having regard to the manner in which the Assessing Officer has issued the notice referred 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 i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AO treated the transaction as slump sale under the provisions of Section 50B of the Act and accordingly completed the assessment u/s 143(3) on 31.3.2004 at an income of Rs. 3,15,60,109/-. 3. Against the said order of the AO, the Assessee preferred first appeal which was dismissed by the learned CIT(Appeals) vide order dated 18.1.2005 whereby the determination of transaction as slump sale by the AO was upheld. Thereafter the Assessee approached the Hon ble ITAT, who vide order dated 20.7.2007 though affirmed the view of the AO qua holding the transaction as slump sale but restored the matter to the file of the AO to determine the market value of shares of the transferee company on the date of the transfer. In compliance to the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw, is illegal and is liable to be deleted. 8. At the outset it was argued by the learned counsel for the Assessee that in the instant case notice dated 30.12.2008 issued by the AO u/s 274 read with Section 271(1) of the Act is vague having not specified particular limb of the penalty and, therefore, the penalty is not leviable. The Assessee in support of its contention also relied upon various judgments of the Hon ble Apex Court and the High Courts. 9. On the contrary the Ld. DR supported the orders passed by the authorities below and submitted that order under challenge does not suffer from any perversity, impropriety and/or illegality and hence needs no interference . 10. Heard the parties and perused the material available on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 penalty notice under Section 274 r.w.s. 271(1)(c) is bad in law and. invalid inspite the amendment of Section 271(1 B) with retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rom non-application of mind. 13. 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 above, held as under: 21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(l)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been issued in a stereotyped manner without applying mind which are bad in law, hence cannot be considered valid notice sufficient to impose penalty u/s 271(1)(c) of the Act and therefore we are of the considered view that under these circumstances, the penalty is not leviable as held by the various Courts including the Hon ble Apex Court and hence, we have no hesitation to delete the penalty under consideration, levied by the AO and affirmed by the Ld. Commissioner . 16. As we have decided the legal issue in favour of the Assessee and deleted the penalty, therefore not dwelling into the merits of the case as the same would become academic exercise only. 17. In the result, the appeal filed by the Assessee is allowed. Order pron ..... X X X X Extracts X X X X X X X X Extracts X X X X
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