TaxTMI 
TaxTMI 
2020 (4) TMI 750
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....uch an order. Hence, the order so passed should be quashed. The same may kindly be quashed. 4. The appellant craves leave to add any new ground of appeal or alter, amend or delete any of the above grounds of appeal. 2. Brief facts of the case are that the assessee filed return of income declaring total income at Rs. Nil. However, the AO completed the assessment by making assessment of Rs. 24,33,996/- on account of disallowances of losses claimed from sale of some scripts. The AO held that shares of the company were only Penny stock. The rates of shares were not based on actual business results of such company but the same were fluctuated or rigged by insider trading, from a negligible value to very high price, without reason or basis only to accommodate entry providers or accommodate losses. Therefore, the loss of Rs. 24,33,996/- was not acceptable and accordingly was disallowed. Simultaneously penalty proceedings u/s 271(1)(c) were initiated separately on the ground that the assessee has concealed income as well as furnished inaccurate particulars of income for which a notice was issued to the assessee requiring to furnish its written submission in this regard. The ....
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....3. Pr. CIT, Kanpur vs. Shri Sandeep Chandak on 27.11.2017 (High Court of Allahabad 7. We have heard rival contentions and perused the record placed before us. With regard to the appeal raised against levy of penalty u/s 271(1)(c) of the Act ground No.3 has been raised as a legal ground. 8. We will first take up legal ground which challenges the legality of the penalty proceedings being void ab initio and bad in law as the penalty notice 274 of the Act is alleged to be defective and issued without specifying the charge on which the penalty has been levied. 9. In order to adjudicate the legal ground we will first like the reproduce impugned notice issued for levy of penalty u/s 271(1)(c) of the Act: OFFICER OF THE ITO-5(1), INDORE NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(c) OF THE INCOME TAX ACT, 1961 PAN:AAOCS4857N ....
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....as to whether the penalty has been levied for concealing of particulars of income or for furnishing inaccurate particulars of income, we find that Hon'ble Jurisdictional High Court in the case of Pr. CIT V/s Kulwant Singh Bhatia(supra) has dealt with the same and Hon'ble Court has dismissed the revenue's appeal setting aside the order of penalty imposed by the authorities by referring to the judgment of Hon'ble Apex Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565(Karnataka) as well as judgment of Hon'ble Apex court in the case of CIT V/s SSA'S Emerald Meadows (2016) 73 taxmann.com 248 (SC) and observed as follows: "On due consideration of the arguments of the Learned counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that Learned Tribunal has rightly relying on the decision of CIT V/s Manjunath Cotton Ginning Factory and CIT V/s SSA'S Emerald Meadows rightly allowed the appeal of the assessee and set aside the order of penalty imposed by the authorities. No substantial question of ....
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....10 at 11.00 AM to show cause why penalty should not be imposed. However. if you do not wish to be heard in person in this regard, you may submit your written submissions so as to reach me by the above date which will be considered before disposal of the matter. Sd/- ( Shrlkant Namdeo ) Deputy GommissfsonerOf1ncome Tax-1(1}, Bhopal Bhopal 13. From perusal of the above show cause notice we find that the Ld.A.O has merely mentioned the section but the specific charge i.e. whether the penalty have been initiated for concealment of particulars of income or for furnishing inaccurate particulars of income has not been mentioned. Now whether such type of notice which does not speak about the specific charge leveled against the assessee is valid and tenable in the eyes of law needs to be examined. 14. We find that similar issue came up before the jurisdictional High Court in the case of Shri Kulwant Singh Bhatia (supra) wherein the Hon'ble Court discussed the judgment of Hon'ble High Court in the case of CIT V/s Manjunatha Cotton Ginning Factory (supra) and CIT V/s SSA's Emeralad Meadows (supra) held that "on due consideration of the argu....