TaxTMI 
TaxTMI 
2017 (9) TMI 645
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..... He placed reliance on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT [229 ITR 383] in support of his contention. The Ld.DR strongly objected for admission of the additional ground. 3. On hearing the both the parties we admit the additional ground filed by the assessee since the very jurisdiction of the Assessing Officer in levying the penalty is questioned. 4. The Learned Counsel for the assessee submits that there is non-application of mind by the Assessing Officer in initiating the penalty proceedings against the assessee. He submits that the Assessing Officer is not clear in his mind against which charge he is imposing penalty. Therefore, he submits that in the absence of any specific charge/non striking of the limb in the penalty notice the Assessing Officer failed to specify the charge being made against the assessee u/s 271(1)(c) of the Act. The Learned Counsel for the assessee strongly placed reliance on the decision of the Coordinate Bench of this Tribunal in the case of Meherjee Cassinath Holdings Private Limited v. ACIT in ITA.No.2555/Mum/2012 dated 28.04.2017, wherein the Coordinate Bench after considering the ....
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.... other words, what Sec. 271(1)(c) of the Act postulates is that the penalty can be levied on the existence of any of the two situations, namely, for concealing the particulars of income or for furnishing inaccurate particulars of income. Therefore, it is obvious from the phraseology of Sec. 271(1)(c) of the Act that the imposition of penalty is invited only when the conditions prescribed u/s 271(1)(c) of the Act exist. It is also a well accepted proposition that 'concealment of the particulars of income' and 'furnishing of inaccurate particulars of income' referred to in Sec. 271(1)(c) of the Act denote different connotations. In fact, this distinction has been appreciated even at the level of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T.Ashok Pal, 292 ITR 11 (SC). Therefore, if the two expressions, namely concealment of the particulars 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 ass....
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....s Emerald Meadows (supra) and against such a judgment, the Special Leave Petition filed by the Revenue has since been dismissed by the Hon'ble Supreme Court vide order dated 5.8.2016, a copy of which is also placed on record. 10. In fact, at the time of hearing, the Id. CIT-DR has not disputed the factual matrix, but sought to point out that there is due application of mind by the Assessing Officer which can be demonstrated from the discussion in the assessment order, wherein after discussing the reasons for the disallowance, he has recorded a satisfaction that penalty proceedings are initiated u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income. In our considered opinion, the attempt of the Id. CIT-DR to demonstrate application of mind by the Assessing Officer is no defence inasmuch as the Hon'ble Supreme Court has approved the factum of non- striking off of the irrelevant clause in the notice as reflective of non-application of mind by 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 Id. CIT-DR based....
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....the return of income. Hence, in the instant case, the assessing officer did not specify the charge for which the penalty proceedings were initiated and also issued an incorrect notice. Both the acts of the AD, in our view, clearly show that the AD did not apply his mind when he issued notice to the assessee and he was not sure as to what purpose the notice was issued. The Hon'ble Bombay High Court has discussed about non-application of mind in the case of Kaushalya (supra) and observed as under:- "... The notice clearly demonstrated non-application of mind on the part of the Inspecting Assistant Commissioner. The vagueness and ambiguity in the notice had also prejudiced the right of reasonable opportunity of the assessee since he did not know what exact charge he had to face. In this back ground, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified." In the instant case also, we are of the view that the AD has issued a notice, that too incorrect one, in a routine manner. Further the notice did not specify the charge for which the penalty notice was issued. Hence, in our view, the AD has failed to apply his mi....