2018 (2) TMI 1912

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....271(1)(c) of the Income Tax Act, 2016 (hereinafter "the Act"). The assessee also filed additional ground on technical and legal issue challenging the validity of the order imposing penalty vide letter dated 26.09.2007 which is reproduced as under: - "1. On the facts and circumstances of the Appellant's case and in Law, the notice issued under Section 274 read with section 271(1)(c) by the Ld. Assessing Officer in a mechanical manner without recording any satisfaction is bad in law and the consequential penalty order passed under Section 271(1)(c) of the Act is bad in law and not sustainable in the eyes of law." 3. We shall first deal with the legal issue raised by the assessee in the additional ground of appeal. The learned A.R. pointe....

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.... mechanical manner without recording any satisfaction and without striking off one of the two limbs, i.e. concealment of income or furnishing of inaccurate particulars of income, consequently the penalty order passed by the AO under Section 271(1)(c) is bad in law and the same should be quashed. 7. The learned A.R. vehemently submitted before us that the notice has been issued by the AO in a mechanical manner without striking off one of the two limbs under which penalty was proposed to be levied and therefore the assessee was deprived of the opportunity to be heard on specific charge thereby causing miscarriage of principles of natural justice as the assessee was not knowing on which limb the penalty was being levied and therefore the pen....

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.... limbs. However, finally was imposed for furnishing of inaccurate particulars of income. The learned D.R. submitted that the assessee was given full particulars before levying penalty and a very detailed discussion was made in the penalty order after considering the reply of the assessee. Therefore, non striking of the irrelevant portion in the penalty notice issued under Section 274 r.w.s. 271(1)(c) of the Act dated 27.12.2010 does not create any ambiguity as the assessee was aware that the penalty proceedings have been initiated for concealment of income as well as furnishing of inaccurate particulars of income. Further the CIT-DR relied on the decision in the case of CIT vs. Smt. Kaushalya & Others 216 ITR 660 (Bom) and the decision of t....