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TMI Blog2024 (10) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 608 - BOMBAY HIGH COURT (LB)] held that the defect in notice by not striking off the irrelevant matter would vitiate the penalty proceedings. Appeal by the assessee is allowed. - Shri Om Prakash Kant, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Rashmikant Modi/Ms. Ketki Rajeshirke For the Revenue : Ms Usha Gaikwad, Sr. AR ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee challenging the impugned order dated 28/12/2023, passed under section 250 of the Income Tax Act, 1961 ( the Act ) by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [ learned CIT(A) ], which in turn arose from the penalty order passed under se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same. The Appellant submits that the technical ground of appeal raised by the Appellant be considered. b. On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble Commissioner of Income Tax (Appeals) erred in upholding the action of the Assessing Officer of issuing Notice u/s 274 r.w.s. 271(1)(c) without specifying the charge for which the notice was issued i.e. either for concealment of particulars of income or furnishing of inaccurate particulars of such income. The Appellant submits the Notice issued u/s 274 r.w.s. 271(1)(c) is without application of mind and therefore be treated as bad in law and consequently the penalty order passed u/s 271(1)(c) be treated as bad in law and therefore, be quash ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the returned loss. Subsequently, based on the information received from the DGIT (Investigation), Mumbai regarding the search action carried out at Surat-based non-genuine diamond concern, who were involved in providing non-genuine sale bills, it was noted that the assessee is one of the beneficiaries who has obtained accommodation entries (sales) from parties who are bogus concerns/companies. Accordingly, notice under section 148 was issued on 28/03/2014 and proceedings under section 147 of the Act were initiated. The Assessing Officer ( AO ) vide order dated 24/02/2015 passed under section 143(3) r/w section 147 of the Act by applying the peak credit theory made an addition of Rs. 86,21,564 under section 69C of the Act by considering t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en recently considered by the Hon ble jurisdictional High Court in the Veena Estate (P) Ltd. v/s CIT, [2024] 461 ITR 483 (Bom.). 8. We have considered the submissions of both sides and perused the material available on record. In the present case, the AO initiated penalty proceedings under section 271(1)(c) of the Act and levied a penalty of Rs. 29,02,020. From the perusal of the notice dated 24/02/2015 issued under section 274 r/w section 271(1)(c) of the Act, forming part of the paper book on page 11, we find that the AO did not strike off any of the twin charges i.e., concealment of particulars of income or furnishing of inaccurate particulars of income. We find that the Larger Bench of the Hon'ble Jurisdictional High Court in Mohd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok. However, we find that the learned CIT(A) vide impugned order dismissed the appeal filed by the assessee and upheld the levy of penalty under section 271(1)(c) of the Act without dealing with the aforesaid submission of the assessee. Being aggrieved, the assessee has again raised this issue in the present appeal before us. Therefore, from the aforesaid factual matrix, we find merit in the submissions of the assessee that the issue as regards the defect in the penalty notice has been raised since the appellate proceedings before the learned CIT(A) against the initiation of penalty under section 271(1)(c) of the Act. Accordingly, we are of the considered view that the decision of the Hon ble Jurisdictional High Court in Veena Estate (P) Lt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd on that basis initiated penalty proceedings under section 271(1)(c) of the Act then consequential notice under section 274 issued by the AO to the assessee is to afford him the opportunity of hearing. However, it is pertinent to note that the decision in Mohd Farhan A. Shaikh (supra), relied upon by the assessee, has been rendered by the Larger Bench of the Hon'ble Jurisdictional High Court and therefore the same is a binding precedent for this bench. 11. Thus, in view of the facts and circumstances as noted in the foregoing paragraph, we are of the considered view that the decision of the Larger Bench of the Hon'ble Jurisdictional High Court in Mohd Farhan A. Shaikh (supra) squarely covers this issue. Accordingly, respectfully f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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