2017 (11) TMI 1004

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....alls and pulses, filed his return of income by declaring taxable income of Rs. 2,89,420/-. The case of the assessee was selected for scrutiny and assessment is completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') by making additions towards undisclosed purchases and sales at Rs. 4,18,000/- and unexplained cash deposits of Rs. 2,73,000/-. The Assessing Officer, thus, determined the total income of the assessee at Rs. 9,80,510/- and issued show-cause notice why penalty should not be levied under section 271(1)(c) of the Act. In response to the notice, the assessee has submitted that he neither concealed any income nor furnished inaccurate particulars, but he agreed for the above two additio....

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....ve has raised an objection for admission of additional legal ground raised by the assessee. 7. We have heard both the sides, perused the material available on record and orders of the authorities below. 8. We find that the issue raised by the assessee is a legal issue and all the facts are available on record. In this context, the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. Vs. CIT (229 ITR 383) has considered the issue and held that 'where the tribunal is only required to consider a question of law arising from the facts which are on record in the assessment proceedings we fail to see why such a question should not be allowed to be raised when it is necessary to consider that question in order to correctl....

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....al available on record and orders of the authorities below. 12 The only issue for adjudication before us is whether the notice issued by the Assessing Officer dated 27/10/2011 is valid or not. For the sake of convenience, the operative part of the notice is extracted as under:- "NOTICE UNDER SECTION 274 READ WITH 5ECTION 271 OF THE INCOME TAX ACT, 1961 Office of the Income tax Officer, Ward-2 Koppu Guranna Buildings, Siddarda Nagar, Vizianagararn ACTPL.9942P/W-2/VZM/2009-10 Dt.27.10.2011 To Sri Ladi Susarita Patro #77-120, MPO Office Road, Kothavalasa, Vizianagaram. Whereas in the course of proceedings before me for the assessment ....

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....cealment of particulars of income or furnished inaccurate particulars. Therefore, the notice issued by the Assessing Officer is a vague notice and is liable to be quashed in the light of the decision of the Hon'ble Jurisdictional High Court in the case of Smt. Baisetty Revathi (supra) and also the decision of the Hon'ble Supreme Court in the case of SSA's Emerald Meadows (supra). The coordinate bench of ITAT Visakhapatnam in the case of Konchada Sreeram Vs. ITO in ITA No. 388/VIZ/2015, by order dated 06/10/2017 has considered the validity of notice by following the above referred to judgments and held that notice issued by the Assessing Officer is not a valid notice and accordingly quashed. For the sake of convenience, the relevant ....

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.... be satisfied that a person has either concealed the particulars of his income or furnished inaccurate particulars of such income. The person who is accused of the conditions mentioned in Section 271 should be made aware of the grounds on which imposition of penalty is proposed as he has a right to contest such proceedings and should have the full opportunity to meet the case of the revenue so as to show that the conditions stipulated in Section 271(1)(c) do not exist and that he is not liable to pay the penalty. The Hon'ble High Court of Karnataka in the case law cited held that the practice of the revenue in sending the printed form where all the grounds mentioned in 271(1)(c) are mentioned would not satisfy the requirement of law when th....

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....vered by the decision of the Hon'ble Jurisdictional High Court of cited (supra) wherein the Hon'ble high court held as under: "On principle, when penalty proceedings are sought to be initiated by the revenue under Section 271(1)(c) of the Act of 1961, the specific ground which forms the foundation therefore has to be spelt out in clear terms Otherwise, on assesee would not have proper opportunity to put forth his defence. When the proceedings are penal in nature resulting in imposition of penalty ranging from 100% to 300% of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to ....