2019 (4) TMI 360

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.... the interest of Rs. 12,80,829/- and business expenses of Rs. 7,08,182/-. Thereafter, he issued notice u/s 274 read with section 271 of the Act on 19.03.2013 which reads as under: Where in the course of proceeding before me for the AY 2010-11 it appears to me that you: - "have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of Explanation 1,2,3,4 and 5." Thereafter, he levied penalty u/s 271(1)(c ) of the Act of Rs. 3,97,576/- for furnishing inaccurate particulars of income. 4. On appeal, the CIT(A) confirmed the action of the AO. Before us, the Ld. Authorised Representative Shri Arun Kishore, CA argued that the Hon'ble Karnataka High Court in the case of VeerbhadrappaSangappa &....

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....ice issued u/s 274 read with section 271(1)(c) dated 19.03.2013 has not specified the exact charge, viz., whether the charge is that the Assessee has furnished inaccurate particulars of income or "concealed particulars of income" by striking out the irrelevant portion of printed show cause notice. 9. Hon'ble Apex Court vide judgment in case of M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC) dismissed the Special Leave Petition filed by the Revenue against the judgment rendered by Hon'ble High Court of Karnataka whereby identical issue was decided in favour of the assessee. Operative part of the judgment in case of M/s. SSA's Emerald Meadows (supra) decided by Hon'ble High Court of Karnataka is reproduced below....

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....alty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. .The Tribunal, while allowing the appeal of the assessee, has relied 01 the derision of the Division Bench of this Court rendered In the case of COMMISSIONER or INCOME TAX -VSMANJUNATHA COTTON AND GINNING FACTORY (2013) 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." 10. Bare perusal of the notice issued u/s 27I(1)(c) apparently goes to prove that the Assessing Officer initiated the penalty procee....

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....es would lead to an inference of non-application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also noticed that where the Assessing Officer issues notice under section 274 of the Act in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. According to the Hon'ble Supreme Court, in such a situation, levy of penalty suffers from non-application of mind. In the background of the aforesaid legal position and, having regard to the man....