TaxTMI 
TaxTMI 
2017 (1) TMI 1034
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee is engaged in trading of food grain items on wholesale basis. The assessee filed his return of income for the assessment year 2007-08 on 31-10-2007 declaring total income of Rs. 4,57,030/-. A survey u/s. 133A of the Act was carried out on the business premises of Chhablani Group on 24-08-2009. During the course of survey the assessee voluntary declared Rs. 43,00,000/- as additional income for assessment year 2007-08 and offered the same for tax by way of revised return of income filed on 29-09-2009. The Assessing Officer vide order dated 07-12-2010 accepted the revised return filed by the assessee without making any further addition. Penalty proceedings u/s. 271(1)(c) of the Act were initiated. The Assessing Officer vide order date....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ice issued without specifying the charge for levy of penalty is not sustainable and the subsequent proceedings arising therefrom are liable to be set aside. In support of his submissions the ld. AR placed reliance on the decision of Hon'ble Karnataka High Court in the case of Commissioner of Income Tax Vs. SSA'S Emerald Meadows reported as 73 taxmann.com 241. The ld. AR further submitted that the Department had filed SLP before the Hon'ble Supreme Court of India against the judgment rendered in the aforesaid case. However, the same was dismissed by the Hon'ble Apex Court in case titled Commissioner of Income Tax Vs. SSA'S Emeral Meadows reported as 73 taxmann.com 248. 4. On the other hand Shri P.L. Kureel representing the Department vehe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....en the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind". The Hon'ble High Court further held that notice u/s. 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds for levy of penalty u/s. 271(1)(c) are mentioned would not satisfy requirement of law. The assessee should know the grounds which he has to meet specific....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Supreme Court in T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC), wherein at page 19 it was held that concealment of income and furnishing inaccurate particulars of income carry different connotation. Applying the said proposition, it was held that where the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similarly, for furnishing inaccurate particulars of income, the standard proforma without striking of relevant clauses, as per the Hon'ble High Court would lead to inference as to non-application of mind. 16. Further, the Hon'ble Karnataka High Court in CIT Vs. SSA'S Emerald Meadows (supra) has dismissed the appeal of Revenue, where the Tribunal had allowed the appeal o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... proceedings both for concealment of income and furnishing of particulars of income against additional income offered by the assessee is incorrect. Further, where the assessee is not aware of exact charge against him, the ambiguity in the notice issued under section 274 r.w.s. 271(1)(c) of the Act by not striking of portion which is not applicable, prejudice the right of reasonable opportunity to the assessee, as he was not made aware of exact charge he had to face. It is a clear-cut case of concealment since the assessee had offered additional income pursuant to search carried out at its premises. It is not the case of furnishing of inaccurate particulars of income and hence, the Assessing Officer should have recorded the satisfaction acco....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s such notice invalid and proceedings thereafter are to be quashed. 25. The Hon'ble Supreme Court in T. Ashok Pai Vs. CIT (supra) had held as under:- "23. Section 271(1)(c) remains a penal statute. The rule of strict construction shall apply thereto. The ingredients for imposing penalty remain the same. The purpose of the Legislature that it is meant to be a deterrent to tax evasion is evidenced by the increase in the quantum of penalty, from 20 per cent under the 1922 Act to 300 per cent in 1985. 24. "Concealment of income" and "furnishing of inaccurate particulars" carry different connotations. Concealment refers to a deliberate act on the part of the assessee. A mere omission or negligence would not constitute a deli....