TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 1002
X X X X Extracts X X X X
X X X X Extracts X X X X
.... Ld. CIT(A) erred in confirming the levy of penalty for concealment at Rs. 2,75,275/- . Even the error in computing the peak balance which was the basis of levy of penalty for concealment has not been appreciated. 2. Briefly stated, the assessee had filed his return of income for Assessment Year 2009-10 on 25.8.2009, declaring an income of Rs. 1,98,390/-. The return of income filed by the assessee was processed as such u/s 143(1) of the I.T.Act. Subsequently, the case of the assessee was selected for scrutiny assessment u/s 143(2) if the I.T.Act. The Assessing Officer assessed the income of the assessee at Rs. 22,55,590/- after making the following additions / disallowances:- Sr.No. Particulars Amount (in Rs.) 1 Addition on account of unexplained cash credits in the bank account 18,16,500 2 Addition on account of interest disallowed u/s 36(i)(iii) 88,855 3 Addition of bank interest 34,242 4 Addition to the rental income 1,97,400 3. Aggrieved, the assessee carried the matter in appeal before CIT(A). The CIT(A) after deliberating on the contentions advanced by the assessee allowed a relief of Rs. 8,97,600/- out of the addition of Rs. 18,16,500/- made on account of un....
X X X X Extracts X X X X
X X X X Extracts X X X X
....naccurate particulars of income". The Ld. AR further drew our attention to the "SCN", dated 23.12.2011 issued u/s 271 read with section 271 of the I.T.Act, which was issued by the Assessing Officer alongwith the assessment order. It was submitted by the Ld. AR that a perusal of the aforesaid "SCN" dated 23.12.2011 did not reveal the default for which the assessee was called upon to explain as to why penalty may not be imposed upon him us 271 (1) (c) of the I.T.Act. It was the claim of the Ld. AR that as the Assessing Officer had ticked both the defaults viz "concealment of particulars of income" or "furnishing of inaccurate particulars of such income", thus, it was not discernible as to for what default the penalty was sought to be imposed by the Assessing Officer under the aforesaid statutory provisions. The Ld. AR further submitted that the assessee in the course of the penalty proceedings had vide his reply dated 10.9.2015 submitted before the Assessing Officer that the penalty proceedings initiated u/s 271 (1) (c) of the Act may be kept pending till the disposal of the appeal before the Income Tax Appellate Tribunal, Amritsar. However, the Assessing Officer despite the aforesai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d to put the assessee to notice as regards the default for which the penalty was sought to be imposed upon him 9. We have given a thoughtful consideration to the facts of the case and are persuaded to subscribe to the claim of the ld. A.R that the A.O had in the aforesaid 'SCN', dated 23.12.2011 and 07.08.2015 failed to point out the default for which penalty was sought to be imposed by him on the assessee. In our considered view, as both of the two defaults envisaged in Sec. 271(1)(c) i.e 'concealment of income' and 'furnishing of inaccurate particulars of income' are separate and distinct defaults which operate in their independent and exclusive fields, therefore, it was obligatory on the part of the A.O to have clearly put the assessee to notice as regards the default for which he was called upon to explain as to why penalty under Sec. 271(1)(c) may not be imposed on him. As observed by us hereinabove, a perusal of the 'Show cause' notices issued in the present case by the A.O under Sec. 274 r.w. Sec. 271(1)(c), dated 23.12.2011 and 07.08.2015 clearly reveals that there has been no application of mind on the part of the A.O while issuing the same. We are of a strong conviction....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e view that the non-striking off the irrelevant limb in the notice clearly reveals a nonapplication of mind by the A.O, had observed as under:- "83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he has furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing reliance on the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from nonapplication of mind. It was also bound to comply with the principles of natural justice [See Malabar Industrial Co. Ltd. Vs. CIT (2000) 2 SCC 718]. We are of the considered view, that now when as per the settled position of law the two defaults viz. 'concealment of income' and 'furnishing of inaccurate particulars of income' are separate and distinct defaults, therefore, in case the A.O sought to have procee....