TaxTMI 
TaxTMI 
TaxTMI 
2018 (1) TMI 22
X X X X Extracts X X X X
X X X X Extracts X X X X
....he standard format without pointing out whether penalty is initiated for concealment of particulars of income or furnishing of inaccurate particulars of income, thus, AO has not striked out the irrelevant portion. For such notice, no penalty is leviable. As per learned AR, penalty order passed on the basis of such invalid notice is bad in law as held in the following cases. 1. CIT v. Shri Samson Perinchery (Honorable Bombay High Court ITA No. 1154,953,1097 & 1126 of 2014 dated 5.1.2017) 2. Meherjee Cassinath Holdings Pvt.Ltd. v. ACIT (ITA No. 2555/Mum/2012) (Mumbai) 3. CIT v. Manjunatha Cotton and Ginning Factory [359 ITR 565] (Karnataka) -Department's SLP dismissed by SC 4. Hafeez S. Contractor v, ACIT (ITA No. 6222-6223/Mum/2013) (Mumbai) 5. Sanghavi Savla Commodity Brokers Pvt Ltd v. ACIT (ITA No. 1746/Mum/2011) (Mumbai) 6. Parinee Developers Pvt Ltd v. ACIT (ITA No. 6772/Mum/2013) (Mumbai) 7. ACIT v. Dipesh M Panjwani (ITA No. 6330/Mum/2012) (Mumbai) 8. DCIT v. Nepa Limited (ITA No. 683/Ind/2013) (Indore) 9. Suvaprasanna Bhattacharya v. ACIT (ITA No. 1303/Ko!/2010) (Kolkata) 10. Ideal Unemployed Engineers Co-Op. Soc. Ltd. v. DCIT (ITA No. ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ities and contended that AO has correctly recorded satisfaction regarding concealment of income, therefore, penalty was correctly levied u/s.271(1)(c) of the IT Act. 10. We have considered rival contentions and carefully gone through the orders of the authorities below and also deliberated on the judicial pronouncements with regard to imposition of penalty when there is a defect in the notice in so far as irrelevant portion in the standard format has not been deleted. We found that notice has been issued by the AO in the standard format wherein it has not been pointed out whether penalty was to be levied for furnishing inaccurate particulars or for concealment of income. What is the exact charge was not mentioned. 11. There can be no doubt that penalty u/s. 271(1)(c) of the Act is levied for concealing particulars of income or for furnishing inaccurate particulars of such Income, which are the two limbs of this provision. In other words, it is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of Manu Engineering Works reported in [1980] 122 ITR 306 (GUJ) and the Delhi High Court in the case of CIT v. Virgo Marketing P Ltd reported in [2008 171 Taxman 156 has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment then the notice has to be appropriately marked Similar is the case for furnishing inaccurate particulars of income. "(p) Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c) i.e. whether it is for concealment of income or for furnishing of incorrect particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 14. Thereafter, in so far as the manner in which the statutory notice was required to be issued, the Hon'ble Court concluded thus: (p) Notice u/s 274 of the Act should be specif....
X X X X Extracts X X X X
X X X X Extracts X X X X
....013) 359 ITR 565. 4. In our view since the matter is covered by judgment of the Division Bench of this Court we are of the opinion no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." 18. The SLP filed by the department in the aforesaid case also was dismissed by the Hon'ble Supreme Court vide Petition for Special Leave to Appeal (C) No .... ./2016 (CC No. 11485/2016) dated 05.08.2016. 19. The Hon'ble jurisdictional High Court in the case of CIT v. Shri Samson Perinchery [Income Tax Appeal No. 1154 of 2014 and others dated 05.01.2017] had also occasion to consider a similar issue. In this case, though proceedings u/s. 271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income, in the notice issued u/s. 274 r.w.s. 271 of the Act in the standard form, the charge for which it was issued was also not identified, as in the present case. In deleting the levy, so far as non-specification of the default in the jurisdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: "7 Therefore, the issue herein stands concluded in favour of the Respondent-Ass....