Court directs Revenue to clarify penalty nature in SCN, grants petitioner response time, emphasizes natural justice principles.

The court directed the Revenue to issue a corrigendum/addendum to the impugned Show Cause Notice (SCN) within three weeks, specifying whether the penalty is for "concealment of income" or "furnishing inaccurate particulars," or both. The petitioner was granted three weeks to respond. The court emphasized adherence to natural justice principles and allowed the petitioner to request a personal hearing if desired. The writ petition was disposed of with these directions, and no costs were awarded.

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Issues Involved:
1. Validity of the Show Cause Notice (SCN) issued under Section 274 read with Section 271 of the Income Tax Act, 1961.
2. Grounds for penalty: "Concealment of income" vs. "Furnishing inaccurate particulars."
3. Applicability of Section 292B of the Income Tax Act.
4. Jurisdiction of the High Court to quash SCNs in writ jurisdiction.

Issue-wise Detailed Analysis:

1. Validity of the SCN:
The petitioner challenged the SCN dated 23.12.2016, issued under Section 274 read with Section 271 of the Income Tax Act, 1961, for the assessment year 2013-14. The petitioner argued that the SCN was vague as it did not specify whether the penalty was for "concealment of income" or "furnishing inaccurate particulars." The petitioner cited several judgments, including Commissioner of Income Tax Vs. SSA's Emerald Meadows and Commissioner of Income Tax Vs. Manjunatha Cotton and Ginning Factory, to support the claim that the SCN was invalid due to its lack of specificity.

2. Grounds for Penalty:
The petitioner contended that "concealment of income" and "furnishing inaccurate particulars" are distinct grounds, and the SCN must clearly specify which ground is being invoked. The court acknowledged this distinction, referencing its own previous judgments and other case laws, including T.Ashok Pai Vs. Commissioner of Income Tax, to affirm that these two expressions fall under different realms and must be clearly stated in the SCN.

3. Applicability of Section 292B:
The Revenue argued that the SCN should not be invalidated merely due to a mistake, defect, or omission, as per Section 292B of the Income Tax Act. The court agreed, stating that the error in the SCN was secretarial and could be rectified. The court held that the SCN qualifies as a notice under Section 292B and should not be deemed invalid due to the error of not specifying the ground for the penalty.

4. Jurisdiction of the High Court to Quash SCNs:
The court discussed the discretionary nature of writ jurisdiction under Article 226 and cited the Supreme Court's judgment in Union of India Vs. Kunisetty Satyanarayana, which held that writ jurisdiction should not ordinarily be exercised to quash SCNs unless they fall under rare and exceptional cases, such as lack of jurisdiction, reopening a settled position of law, prejudging the issue, or being issued with malafides. The court found that the present case did not fall under any of these exceptions and thus did not warrant quashing the SCN.

Conclusion and Order:
The court directed the Revenue to issue a corrigendum/addendum to the impugned SCN within three weeks, clearly specifying whether the penalty is for "concealment of income" or "furnishing inaccurate particulars," or both. The petitioner was given another three weeks to respond to the corrected SCN. The court emphasized adherence to natural justice principles and allowed the petitioner to request a personal hearing if desired. The writ petition was disposed of with these directions, and no costs were awarded.

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