TaxTMI 
TaxTMI 
2019 (5) TMI 1053
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....irst ground of appeal, the assessee has challenged the penalty on the technical issue that Ld. CIT(A) has confirmed the penalty as levied by the AO despite the fact that penalty was initiated for furnishing of inaccurate particulars of income but finally levied for concealment of income and also ignoring the fact that the notice under section 274 read with section 271 of the Act was issued in a mechanical manner without application of mind as the AO has not specified one the two limbs on which penalty was proposed to be levied. 3. The facts in brief are that the assessment was framed in this case vide order dated 06.12.2010 assessing the income at Rs. 24,91,180/- as against the return of income of Rs. 24,90,922/- wherein the AO assessed ....
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....ed to strike off the inappropriate words in the notice. Thus the penalty notice was issued under both the limbs i.e. for concealment of particulars of income as well as for furnishing of inaccurate particulars of income. The Ld. A.R. further stated that the penalty order passed under section 271(1)(c) dated 29.03.2014 levying the penalty for concealment of particulars of income which is blatantly wrong and against the ratio laid down by the various judicial forums. The ld AR contended that the order so framed is bad in law as the assessee was given proper opportunity to defend himself as the charge was not specifically confronted to the assessee. In defense of his arguments, the Ld. A.R. relied on the following case laws: * CIT vs.....
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....business income by the AO besides making small additions on account of disallowance under section 14A of the Act Rule 8D(2)(iii) of Rs. 32,922/-. The Ld. A.R., therefore, submitted that on mere change of heads of income by the AO, penalty u/s 271(1)(c) is not attracted relying on the following decisions: CIT vs. Indersons Leather P. Ltd. 328 ITR 167 (P&H - HC) CIT vs. Shyam Tex International Ltd. 43 DTR 19 (Delhi HC) CIT vs. Chandrasekaran [2015] 56 taxmann.com 210 (Kamataka) Bharat Tiles & Marble (P.) Ltd. vs. DCIT (Mumbai Trib.) dated 14.02.2018 Parinee Developers (P.) Ltd. vs. ACIT [2017] 88 taxmann.com 42 (Mumbai - Trib.) ITO vs. Roborant Investments (P) Ltd 7 SOT 181 (Mum ITAT) ....
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....ated the penalty proceedings thereafter the notice issued under section 274 read with section 271 and the assessee duly participated in the penalty proceedings, therefore the contentions raised by the assessee were duly considered and assessee should not be given the benefit of just non striking off g of particular charge on the penalty notice. The ld Dr contended that it is not open to the assessee to claim that no proper opportunity was given as particular limb on which the penalty was proposed to be levied was not mentioned. The Ld. A.R. relied on the following decisions: 1. Union of India vs. Dharmendra Textile Processors (2007) 295 ITR 244 2. RL Traders vs. ITO (2017-TIOL-2583-HC-DEL-IT) 3. CIT vs. Zoom Commu....
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....other words, the notice was issued in a standard format without any application of mind and the inappropriate/redundant words were not deleted by the AO. Thereafter, the penalty was imposed for concealment of particulars of income which is different from the limb on which the penalty was initiated in the assessment order. In our opinion, by these acts of the AO in not striking off the inappropriate limb in the notice and initiating the penalty on one limb and imposing penalty finally on the other limb is clear cut in violation of principle of natural justice as the assessee was deprived of reasonable opportunity to respond and deal with the particular charge on which the penalty was levied. In our view, the penalty order in such a scenario ....