TaxTMI 
TaxTMI 
2017 (9) TMI 716
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....ssessee filed revised computation duly incorporating the capital gain and also paid tax thereon. However, the AO also initiated penalty u/s.271(1)(c) which was confirmed by the CIT(A) and assessee is in further appeal before us. 5. It was submitted by learned AR that revised computation was filed by the assessee during the course of assessment proceedings itself and that non-inclusion of the capital gains in the return of income is attributable to the mistake of the Chartered Accountant filing the return of income and the assessee should not be saddled with penalty u/s. 271(1)(c) for the mistake of a CA-Price Waterhouse Coopers - 348 ITR 306 (SC). 6. It was further submitted that the Assessing Officer has mentioned in the assessment order that the penalty under section 271(1)(c) is initiated for furnishing of inaccurate particulars of income and concealment of income. However, the notice issued under section 274 r.w.s. 271 is a stereotype one - not tick marked for which limb of the two limbs to section 271(1)(c) the penalty is initiated; and thus, the notice issued under Section 274 r.w.s. 271 itself is faulty in as much as there is non-application of mind by the Assessing Office....
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....ve relying upon the observations of the Assessing Officer and the learned Commissioner (Appeals) submitted, as the assessee has deliberately not offered to tax income and which came to the notice of the Assessing Officer only because of the scrutiny assessment proceedings the imposition of penalty under section 271(1)(c) is justified. 6. We have considered the submissions of the parties and perused the material available on record. Undisputedly, in the return of income assessee has failed to offer interest on fixed deposit amounting to Rs. 5,92,186 and loss claimed on account of fixed asset written-off amounting to Rs. 1,82,242. It is also a fact on record that in the course of assessment proceedings, the assessee accepted the taxability of these items of income and offered them to tax. The assessee has explained that non-disclosure of aforesaid two items of income is due to oversight and due to the fact that neither in the tax audit nor in the statutory audit such omission was pointed out. We find merit in the aforesaid explanation of the assessee. In fact, in Para-4.3.2 of his order, the learned Commissioner (Appeals) has observed that the explanation offered by the assessee with....
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....r opportunity to explain its stand, thereby, violates the principles of natural justice. As held by the Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC), the aforesaid principle laid in Dilip N. Shroff (supra) still holds good in spite of the decision of the Hon'ble Supreme Court in UOI v/s Dharmendra Textile Processors (2008) 306 ITR 277 (SC). The Hon'ble Jurisdictional High Court in CIT v/s Smt. Kaushalya & Ors., [1995] 216 ITR 660 (Bom), observed that notice issued under section 274 must reveal application of mind by the Assessing Officer and the assessee must be made aware of the exact charge on which he had to file his explanation. The Court observed, vagueness and ambiguity in the notice deprives the assessee of reasonable opportunity as he is unaware of the exact charge he has to face. The Hon'ble Jurisdictional High Court in Samson Perinchery (supra), following the decision of Hon'ble Karnataka High Court in CIT v/s Manjunatha Cotton & Ginning Factory, [2013] 359 ITR 565 (Kar.), held, order imposing penalty has to be made only on the ground on which the penalty proceedings has been initiated. In the present case, ....
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....ppa 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 particulars is valid and legal?" 10. While answering the above in favour of the assessee, the following findings were recorded by the Hon'ble Court: "61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment furnishing inaccurate particulars of income are different Thus, the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The apex court in th....
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....ose 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?" 14. The aforesaid question was dealt with by the Honble Court in favour of the assessee in the following words: "3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with section 271(1)(c) of the Income-tax Act 1961 (for short 'the Act; to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act the penalty proceedings had been initiated le. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunel while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner of Income-tax v....