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TMI Blog2024 (2) TMI 1227X X X X Extracts X X X X X X X X Extracts X X X X ..... entical in all these years and hence, by way of this common order, these appeals are being disposed off. 3. The only common issue in these four appeals of assessee is as regards to the order of CIT(A) confirming the action of AO in levying penalty u/s. 271(1)(c) r.w.s 274 of the Act. The issue raised as regards to jurisdiction in these four appeals is that the AO has initiated under which limb or charge for which the penalty was levied or penalty proceedings initiated whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income rather initiation in the assessment order is for under reporting of income as per amended provisions of section 270A of the Act, as inserted by Finance Act, 2016 w.e.f. 01.04.2017. 4. Brief facts of the case are that the assessee is engaged in the business of money lending. A survey u/s. 133A of the Act was conducted on the business premises of the assessee on 19.02.2020. During the course of survey, the AO found that the assessee has introduced new deposits / unsecured loans to the extent of Rs. 37,12,500/- during financial year 2012-13 relevant to this assessment year 2013-14. Accordingly, notice u/s. 148 of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of Babuji Jacob vs. ITO reported in 430 ITR 259 and finally, the CIT(A) held as under: 7.4.4 Hon'ble courts have held in following cases that where both limbs are attracted, non-striking of one of the limbs in the penalty notice would not invalidate penalty and that minor defect in the notice issued cannot be the basis of deletion of penalty levied or declaring the penalty proceedings as null and void. 1. Dhanraj Mills Put. Ltd. us ACIT, ITA No. 3830 & 3833/Mum/2009 dated 21.03.2017 2. Earthmoving Equipment Service Corporation vs DCIT,84 Taxmann.com 51 3. Mahesh M Gandhi vs ACIT.ITA No.2976/Mum/2016 dated 27.02.2017 4. Hon'ble Bombay High Court in the case of CIT vs. Smt.Kaushalyal & Ors. (1995) 216 ITR 660 (Bom). 5. Hon'ble Bombay High Court (Nagpur Bench) in the case of M/s.Maharaj Garage & Company Vs. CIT Dt. 22-08-2017. 6. Hon'ble Patna High court in the case of CIT v. Mithila Motors (P.) Ltd. (1984] 149 ITR 751 (Patna) 7. Sundaram Finance Limited Vs ACIT ( 2008) 99 taxmann.com 152 8. Jyothirmoy yamsani Vs DCIT ITA No 1519/Hyd/2016 9. Manjeet kaur saran Vs DCIT ITA No 2639 to 2643/del/2017 10. HPCL Mittal Energy Vs Addl CIT 97 Taxmnann.com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b under which penalty proceedings are initiated. The ld.Senior DR referred to initiation of penalty proceedings in the assessment order which we have already reproduced and for the sake of clarity, it is once again reproduced as under:- "Penalty proceedings u/s 271(1)(c) is initiated separately for under reporting of income." The ld.Senior DR argued that as the AO has clearly recorded the reason as 'under reporting' in the body of the assessment order for initiation of penalty proceeding, the ground raised by the appellant has no merit and needs to be dismissed. He argued that the assessee in support of his plea has produced certain communication obtained from the Department, which the assessee considers as a statutory notice u/s. 274, wherein the AO has failed to identify whether the proceeding was initiated for 'concealment or for furnishing inaccurate particulars of income'. The ld.DR has submitted his comments as follows:- a) By just mention of the word 'notice' in a communication addressed, such communication would not amount to a 'statutory notice' Section 274 of the Act does not mandate an Assessing Officer to issue any notice leave alone a statutory notice.. The langua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tioned to be issued u/s 142(1) or u/s 143(2) or u/s 148 etc. However, the same law has been stringent when it comes to some other provisions such as section I56 of the Income Tax Act. It had specifically mandated issuance of only a Statutory prescribed notices. All such statutory prescribed notices are prescribed under the Income tax Rules, 1962 and published. As can be seen from these rules, the only statutorily prescribed notice for any Assessment or Penalty proceeding is service of Demand notice in Form No.7 of IT Rules-1 962. iii) The practice of issuance of a pre-printed communication with the word 'notice u/s 274....' or 'show-cause notice u/s 274...' etc. cannot be contrary to the laid out law. In the absence of legislation, the accepted practices can become a law. However, as demonstrated in Para.2(c)(i) above, in the Income Tax Act, the legislation has been clear in usage of the language at various places as far as the types of communications are concerned. However, till this date to the knowledge of the undersigned, no courts in this country had carried out a genuine analysis of the language use across the sections of the Act with respect to various forms of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntentions and gone through the facts and circumstances of the case. Admittedly in all these years i.e., assessment years 2013-14 to 2016-17 in the above appeals, the AO initiated penalty proceedings in the relevant assessment orders as "penalty proceedings u/s. 271(1)(c) is initiated separately for under reporting". It means that the charge framed by AO to reach at a satisfaction that there is under reporting but not for, either concealment of income or furnishing of inaccurate particulars of income. The argument made by the ld. Senior DR that this is only a terminology to denote concealment, cannot be accepted because the legislature in its wisdom has made amendment in the provisions and instead of provisions of section 271(1)(c) of the Act, now brought in the statute book the provision of section 270A of the Act as introduced by the Finance Act, 2016 w.e.f. 01.04.2017 and applicable for and from 2017-18 i.e., penalty for underreporting or misreporting of income. It means that the AO has not at all applied his mind while initiating penalty and the specific charge is not framed for initiating penalty and hence, the argument of Senior DR that the notice issued u/s. 274 or show-cause ..... X X X X Extracts X X X X X X X X Extracts X X X X
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