TaxTMI 
TaxTMI 
2020 (1) TMI 160
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....ause notice issued u/s 274 and the consequent impugned penalty order dated 24/06/2019, is quite vague and does not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated and/or imposed i.e. whether for concealment of particulars of income or furnishing or inaccurate particulars of income. The impugned penalty order being contrary to the judicial principle laid down kindly be quashed. 4. That appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing." 2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is having income from capital gains and interest. After issuance of notice U/s 148 of the Act, the A.O. initiated reassessment proceedings U/s 147 of the Act. While completing the assessments u/s 147/143(3) of the Act and with respect to the income so offered in the return of income and accepted by the AO, the AO initiated penalty proceedings u/s 271(1)(c) and notice u/s 274 dated 05.12.2016 was issued in response to which the assessee filed a detailed reply dated 27.12.2016. The AO, however, felt dissatisfied and held that ....
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....s in the SCN. 7. The extract from SCN, is reproduced hereunder: "x x x x it appears that you have concealed the particulars of your income or furnished inaccurate particulars of income." In fact, this confusion with the AO even continued while passing the impugned penalty order inasmuch as at the end of the order, while concluding and computing the penalty, the AO has stated as under " --- concealed income/ inaccurate particulars of income - - Rs. 14,10,350/-". Thus, even while imposing the penalty he was not sure, on which limb he imposed the penalty. 8. With respect to above factual position, I have deliberated on the judicial pronouncements cited by the ld AR in the case of CIT & Anr. Vs Manjunatha Cotton and Ginning Factory 359 ITR 565 (Karn) which was subsequently followed by the Hon'ble Gujarat High Court in the case of New Sorathia Engineering Co. Vs CIT (2006) 282 ITR 0642 (Guj) and other judicial pronouncements as placed on the record, more precisely decision of the ITAT Jaipur Benches in the case of Shri Ramesh Chand Bansal Vs DCIT in ITA No. 398, 399, 400 & 401/JP/2015 vide order dated 21.06.2018, wherein it was held that: "..........Thus, the AO has not specified....
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....income or for furnishing inaccurate particulars of such Income, which are the two limbs of this provision. In other words, it is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 of the Act, which is the jurisdictional notice, for visiting an assessee with the penal provision. The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point. In the present case, neither the assessee nor anyone else could make out as to whether the notice u/s. 274 r.w.s. 271 of the Act was issued for concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with the case of the Assessing Officer. There are a catena of judgments highlighting the necessity for identifying the charge for which the assessee is being visited and in all those decisions, Hon'ble Courts have repeatedly held t....
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.... of income or for furnishing of incorrect particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 13. Thereafter, in so far as the manner in which the statutory notice was required to be issued, the Hon'ble Court concluded thus: (p) Notice u/s 274 of the Act should be specifically state the grounds mentioned in section 271(1)(c), i.e. whether it is for concealment of income or for furnishing of incorrect particulars of income. 14. Finally, in concurring with the findings recorded in the order of the Tribunal, it was held thus: 66. In view of the aforesaid law, we are of the view that the Tribunal was justified in holding that the entire proceedings are vitiated as the notice issued is not in accordance with law and accordingly justified in interfering with the order passed by the appellate authority as well as the assessing authority and in setting aside the same. Hence, we answer the substantial questions of law framed in this case in favour of the assessee and against the Revenue. " 15. The aforesaid judgment was unsuccessfully challenged by the revenue before the Supreme Court, as i....
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....e Act in the standard form, the charge for which it was issued was also not identified, as in the present case. In deleting the levy, so far as non-specification of the default in the jurisdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: "7 Therefore, the issue herein stands concluded in favour of the Respondent-Assessee by the decision of the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory (supra). Nothing has been shown to us in the present facts which would warrant our taking a view different from the Karnataka High Court in the case of Menjuneth Cotton and Ginning Factory (supra). 8. In view of the above, the question as framed do not give rise to any substantial question of law Thus, not entertained" 19. The Hon'ble Supreme Court in Dilip N. Shroff v/s JCIT, [2007] 291 ITR 519 (SC), has observed that while issuing the notice under section 274 r/w section 271, in the standard format, the Assessing Officer should delete the inappropriate words or paragraphs, otherwise, it may indicate that the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had conce....