TaxTMI 
TaxTMI 
TaxTMI 
2017 (8) TMI 1061
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.... "1) On the facts and circumstances of the case, the learned CIT (Appeals) legally erred in confirming the order of the AO levying the penalty u/s.271(1)(c) of the Act of Rs. 28,57,054/-. 2) On the facts and circumstances of the case, the learned CIT (Appeals) erred in rejecting the claim of the appellant, that the order passed u/s 271(l)(c) is bad in law, void ab-initio inasmuch as the assessment order itself is bad in law, for the reason that it is passed pursuant to the search and seizure and there is no addition to the income qua search, hence the order passed u/s 153C r.w.s. 143(3) of the Act itself is bad in law. 3) On the facts and circumstances of the case, the learned CIT (Appeals) failed to appreciate that before detection by the department, the appellant had suo moto offered the impugned disallowance of deferred revenue expenditure of Rs. 84,87,981/- during the assessment proceedings. Hence, there is no concealment of income on the part of the appellant and the appellant is entitled to succeed on merits, 4) Your appellant craves leave of your Honour to add, to alter, to amend and/or to delete all or any of the forgoing grounds of appeal on or before the date o....
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....rmal Power Company Ltd. vs. CIT, 229 ITR 383(SC)and Hon'ble Bombay High Court in the case of Ahmedabad Electricity Co. Ltd.,199 ITR 351(Bom) It has also been asserted the point sought to be raised by the assessee is based on the judgment of the Hon'ble Bombay High Court in the case of CIT vs. Shri Samson Perinchery in ITA Nos.1154,953, 1097 & 1226 of 2014 dated 05/01/2017 and, therefore, it was canvassed that in view of the later judgment of the Hon'ble Bombay High Court, the assessee was justified in raising such Additional Ground of appeal. 6. On the other hand, the Ld. Departmental Representative pointed out that the new plea sought to be raised by the assessee was hitherto not raised before the lower authorities and that there was no justification to raise such a plea belatedly. 7. We have carefully considered the rival submissions on the issue of admission of aforesaid Additional Ground of appeal. In our view, the aforestated Additional Ground raised by the assessee involves a pure point of law and its determination is feasible in the instant case, on the basis of the material and facts already existing on record. Therefore, following the ratio of the judgment of....
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....enalty is unsustainable. In this context, the Ld.Representative for the assessee placed reliance on the decision of the Tribunal in the case of Shri Samson Perinchery, in ITA No. 4625 to 4630/Mum/2013 dated 11/10/2013, which has since been upheld by the Hon'ble Bombay High Court vide its order in ITA Nos. 1154,953, 1097 & 1226 of 2014 dated 5/01/2017. Apart therefrom, reliance has also been placed on the recent decision of the Mumbai Tribunal in the case of Meherjee Cassinath Holdings Private Limited vs. ACIT, ITA No.2555/Mum/2012 vide order dated 28/04/2017, wherein under similar circumstances the levy of penalty under section 271(1)(c) of the Act has been set aside. 7.3 On this aspect, the Ld. Departmental Representative appearing for the Revenue pointed out that in the assessment order the Assessing Officer has initiated the penalty for furnishing of inaccurate particulars of income and, therefore, even if in the notice issued under section 274 r.w.s. 271 of the Act dated 30/12/2009, the irrelevant limb has not been struck off, it would still imply that the penalty was sought to be initiated for furnishing of inaccurate particulars of income. In so far as the merit of the p....
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....e manner in which the penalty has been ultimately imposed by the Assessing Officer in his order dated 30/06/2010 (supra). In the penalty order, the Assessing Officer holds as under:- " that the assessee has concealed/furnishing of inaccurate particulars of income to the extent of Rs. 84,87,981/- and thus committed default under section. 271(1)(c) of the I T Act, 1961." The aforesaid inference of the Assessing Officer clearly reflects confusion in his mind as to under which of the two limbs, penalty is to be levied under section 271(1)(c) of the Act. 7.6 In our considered the opinion, the following discussion in the order of the Tribunal in the case of Meherjee Cassinath Holdings Private Limited (supra) covers the controversy:- "............. Another pertinent point raised by the assessee was that the penalty notice issued u/s 274 r.w.s. 271 of the Act dated 10.12.2010, a copy of which has been placed on record, reveals non-application of mind by the Assessing Officer inasmuch as the irrelevant portion of the notice has not been struck off. It was, therefore, contended that the levy of penalty is illegal and deserves to be setaside. In support of the aforesaid proposition, reli....
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....culars of income' and 'furnishing of inaccurate particulars of income' have different connotations, it is imperative for the assessee to be made aware as to which of the two is being put against him for the purpose of levy of penalty u/s 271(1)(c) of the Act, so that the assessee can defend accordingly. It is in this background that one has to appreciate the preliminary plea of assessee, which is based on the manner in which the notice u/s 274 r.w.s. 271(1)(c) of the Act dated 10.12.2010 has been issued to the assessee-company. A copy of the said notice has been placed on record and the learned representative canvassed that the same has been issued by the Assessing Officer in a standard proforma, without striking out the irrelevant clause. In other words, the notice refers to both the limbs of Sec. 271(1)(c) of the Act, namely concealment of the particulars of income as well as furnishing of inaccurate particulars of income. Quite clearly, nonstriking- off of the irrelevant limb in the said notice does not convey to the assessee as to which of the two charges it has to respond. The aforesaid infirmity in the notice has been sought to be demonstrated as a reflection of non-applicati....
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.... the Assessing Officer. Since the factual matrix in the present case conforms to the proposition laid down by the Hon'ble Supreme Court, we proceed to reject the arguments advanced by the ld. CIT-DR based on the observations of the Assessing Officer in the assessment order. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court also in the case of Shri Samson Perinchery, ITA Nos. 1154, 953, 1097 & 1126 of 2014 dated 5.1.2017 (supra) and the decision of the Tribunal holding levy of penalty in such circumstances being bad, has been approved. 11. Apart from the aforesaid, the ld. CIT-DR made an argument based on the decision of the Hon'ble Bombay High Court in the case of Smt. Kaushalya & Others, 216 ITR 660 (Bom.) to canvass support for his plea that non-striking off of the irrelevant portion of notice would not invalidate the imposition of penalty u/s 271(1)(c) of the Act. We have carefully considered the said argument set-up by the ld. CIT-DR and find that a similar issue had come up before our coordinate Bench in the case of Dr. Sarita Milind Davare (supra). Our coordinate Bench, after considering the judgment of th....
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....manner. Further the notice did not specify the charge for which the penalty notice was issued. Hence, in our view, the AO has failed to apply his mind at the time of issuing penalty notice to the assessee." 12. The aforesaid discussion clearly brings out as to the reasons why the parity of reasoning laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) is to prevail. Following the decision of our coordinate Bench in the case of Dr. Sarita Milind Davare (supra), we hereby reject the aforesaid argument of the ld. CIT-DR. 13. Apart from the aforesaid discussion, we may also refer to the one more seminal feature of this case which would demonstrate the importance of nonstriking off of irrelevant clause in the notice by the Assessing Officer. As noted earlier, in the assessment order dated 10.12.2010 the Assessing Officer records that the penalty proceedings u/s 271(1)(c) of the Act are to be initiated for furnishing of inaccurate particulars of income. However, in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act of even date, both the limbs of Sec. 271(1)(c) of the Act are reproduced in the proforma notice and the irrelevant clause has not been st....