TaxTMI 
TaxTMI 
2017 (6) TMI 298
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....ed by the Assessee as income from other sources of Rs. 5,93,622/-. 4. With respect to the income so offered and accepted by the AO, AO also levied penalty u/s.271(1)(c) which was confirmed by the CIT(A) and assessee is in further appeal before us. 5. It was argued by learned AR that during the course of assessment proceeding itself, assessee has voluntarily offered the income of Rs. 5,93,622/- for which assessee's claim of long term claim was declined. Our attention was also invited to the letter furnished to the AO for not initiating penalty proceedings and surrender of sale proceeds was in order buy piece of mind and to avoid hazards of litigation and also to save himself from any penal action. 6. Learned AR placed on record the decision of Punjab and Haryana High Court in case of Rajiv Garg, wherein under similar facts and circumstances, Hon'ble High Court has upheld deletion of penalty so imposed u/s.271(1)(c) of the IT Act. The precise observation of High Court was as under:- 6.We have heard the learned counsel for the appellant and gone through the impugned order. Learned counsel for the appellant submitted that in the present case the assessee filed its revised r....
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....and to avoid hazards of litigation and also to save himself from any penal action. Later on, on the basis of revised return, the assessment was framed and the return submitted by the assessee was regularized as it is. During the course of assessment, the aforesaid explanation given by the assessee was neither rejected nor it was held to be mala fide. The Tribunal has recorded a pure finding of fact to the effect that the revenue has not placed on record any material or evidence to discharge its burden of proving concealment. In the assessment order no such finding was recorded. The Department has simply rested its conclusion on the act of assessee of having offered additional income in the return filed in response to the notice issued under section 148 of the Act. The Tribunal has further held that the additional income so offered by the assessee was done in good faith and to buy peace. The Tribunal has relied upon the decision of the Apex Court in case of CIT v. Suresh Chandra Mittal ROOD 251 ITR 9, wherein the Supreme Court has upheld the decision of the Madhya Pradesh High Court CITSuresh Chandra Mittal r2QOOj 241 ITR 124, where in similar circumstances it was held that the init....
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....e issued u/s.274 r.w.s.271 (1)(C), AO has not deleted the inappropriate words. 9. On the other hand, learned DR relied on the order of the lower authorities and contended that since the capital gain offered by the assessee was found to be non-genuine, AO was justified in levying the penalty. As per learned DR, merely non-striking of inappropriate words in the notice will not invalidate the proceedings in so far as assessee has participated in the penalty proceedings. 10. We have considered rival contentions and carefully gone through the orders of the authorities below, We found that decision of the Punjab and Haryana High Court in case of Raj Rani Mittal as relied on by the learned AR squarely applies to the facts of the assessee's case. Accordingly, penalty so imposed was not justified. 11. Even on the legal issue, we found that the two charges for initiating the penalty operate on two different footing and under the penal provision the charge has to be very specific and not vague. These charges are not to be reckoned as any casual remark, which can be interchanged by the AO at any stage on his whims and fancies. It is not an error which is rectifiable or to be ignored, ....
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.... concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with the case of the Assessing Officer. There are a catena of judgments highlighting the necessity for identifying the charge for which the assessee is being visited and in all those decisions, Hon'ble Courts have repeatedly held that where the jurisdictional notice is vague, similar to the one in the present case, the consequent levy cannot be sustained. 14. In this connection, reliance is first placed upon the judgment of the Hon'ble Karnataka High Court In the case of CIT v. Manjunatha Cotton and Ginning Factory & Ors. and Veerabhadrappa Sangappa and Co. (359 ITR 565, 577, 601, 603-604) in which the facts are similar. In those bunch of tax appeals, several assessee and several issues were involved. In so far as I.T.A. No. 5020 of 2009 was concerned, one of the substantial questions on which the appeal was filed by the revenue was: "Whether the notice issued under section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate par....
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....tified in interfering with the order passed by the appellate authority as well as the assessing authority and in setting aside the same. Hence, we answer the substantial questions of law framed in this case in favour of the assessee and against the Revenue." 18. The aforesaid judgment was unsuccessfully challenged by the revenue before the Supreme Court, as it was rejected vide Petition for Special Leave to Appeal (C) No. 13898/2014 dated 11.07.2016. Reliance was next placed upon another judgment of the Hon'ble Karnataka High Court in the case CIT v. SSA'S Emerald Meadows (Income Tax Appeal No. 380 of 2015 decided on 23.11.2016). In this case also s similar situation arose in as much as the Hon'ble Court was required to adjudicate on the following substantial question: (1) Whether, omission of 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?" 19. The aforesaid question was de....