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TMI Blog2023 (4) TMI 85X X X X Extracts X X X X X X X X Extracts X X X X ..... that the standard proforma of notice u/s 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. It is imperative for the AO 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 - we have no hesitation to delete the penalty levied by the AO and affirmed by the Ld. Commissioner. Appeal filed by the Assessee stands allowed. - ITA No. 2523/Del/2019 - - - Dated:- 23-2-2023 - Shri Anil Chaturvedi, Accountant Member And Shri N.K. Choudhry, Judicial Member For the Appellant : Ms. Sanjana Sachdev, Ld. Adv. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the penalty order on the premise that the Assessee had not been able to prove the genuineness of share capital of Rs.35,00,000/- either during the assessment proceedings or appellate proceedings and even in the course of penalty proceedings. Being aggrieved by the impugned order, the Assessee is in appeal before us. 4 . Heard the parties and perused the material available on record. The ld. Counsel, Ms. Sanjana Sachdev, Ld. Advocate at the outset claimed that in the assessment order, the satisfaction was recorded for initiation of penalty proceedings for furnishing of inaccurate particulars of income. However, the Assessing Officer in the penalty proceedings, issued the notice u/s. 274/271(1)(c) of the Act, for concealment of particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion by this Court, and the appeal is accordingly dismissed. 5.2. The Hon'ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory, 359 ITR 565 (Kar) observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, 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. 5.3. Even the Hon ble Hig ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meanings. 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. 5.5 Though as per our wisdom, the contention of Mr. Mohd. Gayasuddin Ansari, Ld. CIT/DR, to the effects that the Assessee by filing its reply to the notice u/s. 274/271(1)(c) of the Act, has acknowledged the initiation of penalty proceedings for furnishing of inaccurate particulars of income, therefore, the penalty levied by the Assessing Officer and affirmed by the ld. Commissioner does not require any in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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