TaxTMI 
TaxTMI 
2019 (6) TMI 1118
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.... proceeded against for levy of penalty u/s 271(1)(c) of the Act i.e. to have concealed particulars of income or having furnished inaccurate particulars of income. Assailing the decision of the ld. CIT(A) in confirming penalty, the ld. AR cited several decisions including the decision of the Hon'ble Calcutta High Court & Hon'ble Supreme Court (which we will discuss infra while adjudicating the issue) & pleaded that the penalty be cancelled for defect of show-cause notice. 3. However, learned DR drew our attention to the decision of Hon'ble Tamil Nadu High Court in Sundaram Finance Ltd. Vs. ACIT (2018) 93 taxman.com 250 (Chennai) dated 23.04.2018 wherein the Hon'ble High Court did not accept the assessee's challenge in respect of similar invalid notice and after taking into consideration the Hon'ble Karnataka High Court order in CIT vs. SSA's Emerald Meadows in ITA No.380 of 2015 dated 23.11.2015 was pleased to uphold the penalty u/s. 271(1)(c) of the Act which order has been confirmed by the Hon'ble Supreme Court vide order dated 26.10.2018 reported in 99 taxman.com 152 (SC) and certain other decisions which we will discuss infra. He, therefore, urged before the bench to confirm th....
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..... ACIT, ITA No. 956/Kol/2016 for AY 2010-11 dated 01.12.2017, wherein the Tribunal has taken note of all the case laws of ld. AR and ld. DR and adjudicated the issue as under: "7. The learned DR submitted that the Hon'ble Calcutta High Court in the case of Dr.Syamal Baran Mondal Vs. CIT (2011) 244 CTR 631 (Cal) has taken a view that Sec.271 does not mandate that the recording of satisfaction about concealment of income must be in specific terms and words and that satisfaction of AO must reflect from the order either with expressed words recorded by the AO or by his overt act and action. In our view this decision is on the question of recording satisfaction and not in the context of specific charge in the mandatory show cause notice u/s.274 of the Act. Therefore reference to this decision, in our view is not of any help to the plea of the Revenue before us. 8. The learned DR relied on three decisions of Mumbai ITAT viz., (i) Dhanraj Mills Pvt. Ltd. Vs. ACIT ITA No.3830 & 3833/Mum/2009 dated 21.3.2017; (ii) Earthmoving Equipment Service Corporation Vs. DCIT 22(2), Mumbai, (2017) 84 taxmann.com 51 (iii) Mahesh M.Gandhi Vs. ACIT Vs. ACIT ITA No.2976/Mum/2016 dated 27.2.2017. Relian....
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....follow the decision rendered in the case of Manjunatha Cotton & Ginning Factory (supra) for the reason that penalty in that case was deleted for so many reasons and not solely on the basis of defect in show cause notice u/s.274 of the Act. This is not factually correct. One of the parties before the group of Assessees before the Karnataka High Court in the case of Manjunatha Cotton & Ginning (supra) was an Assessee by name M/s.Veerabhadrappa Sangappa & Co., in ITA NO.5020 OF 2009 which was an appeal by the revenue. The Tribunal held that on perusal of the notice issued under Section 271(1)(c) of the Act, it is clear that it is a standard proforma used by the Assessing Authority. Before issuing the notice the inappropriate words and paragraphs were neither struck off nor deleted. The Assessing Authority was not sure as to whether she had proceeded on the basis that the assessee had either concealed its income or has furnished inaccurate details. The notice is not in compliance with the requirement of the particular section and therefore it is a vague notice, which is attributable to a patent non application of mind on the part of the Assessing authority. Further, it held that the ....
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....o the facts of that case because the AO in the assessment order while initiating penalty proceedings has held that the Assessee had concealed particulars of income and merely because in the show cause notice u/s.274 of the Act, there is no mention whether the proceedings are for furnishing inaccurate particulars or concealing particulars of income, that will not vitiate the penalty proceedings. In the present case there is no whisper in the order of assessment on this aspect. We have pointed out this aspect in the earlier part of this order. Hence, this decision will not be of any assistance to the plea of the revenue before us. Even otherwise this decision does not follow the ratio laid down by the Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning (supra) in as much as the ratio laid down in the said case was only with reference to show cause notice u/s.274 of the Act. The Hon'ble Court did not lay down a proposition that the defect in the show cause notice will stand cured if the intention of the charge u/s.271(1) (c ) is discernible from a reading of the Assessment order in which the penalty was initiated. 14. From the aforesaid discussion it can be seen ....