2020 (5) TMI 137

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....by declaring total income of Rs. 2,93,150/-. The case of the assessee was selected for scrutiny and assessment was completed under section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act') by making certain additions. Subsequently, penalty notice u/sec. 274 r.w.s. 271 of the Act, dated 28/12/2011 was issued and thereafter penalty order u/sec. 271(1)(c) was passed on 27/10/2016. 3. On appeal, ld. CIT(A) confirmed the penalty order passed by the Assessing Officer. 4. Aggrieved, the assessee has raised the following additional ground before the Tribunal. "Taking cognizance of the fact that there is no specification in the notice u/sec. 274 r.w.s. 271(1)(c) of the Act, as to whether the proceedings....

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....ation on facts is required, the additional ground raised by the assessee has to be adjudicated, hence, the same has to be admitted by following the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd., (supra), the additional ground raised by the assessee is admitted. 9. Now coming to the validity of the notice issued by the Assessing Officer dated 28/12/2011. In this context, learned counsel for the assessee has submitted that the notice issued by the Assessing Officer is not clear whether notice issued under section 274 r.w.s. 271 is for concealment of income or furnished inaccurate particulars. Therefore, the notice issued by the Assessing Officer is not a valid notice in the light of the latest jud....

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....ight of the decision of the Hon'ble High Court of Telangana & A.P. in the case of Smt. Baisetty Revathi (supra) and also the decision of the Hon'ble Supreme Court in the case of SSA‟s Emerald Meadows (supra). The coordinate bench of the Visakhapatnam tribunal in the case of Konchada Sreeram Vs. ITO in ITA No. 388/VIZ/2015, by order dated 06/10/2017 has considered the validity of notice by following the above referred to judgments and held that notice issued by the Assessing Officer is not a valid notice and accordingly quashed. For the sake of convenience, the relevant portion of the order is extracted as under:- 6. We have heard both the parties and perused the material placed on record. In this case, the assessee ha....

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....d of the conditions mentioned in Section 271 should be made aware of the grounds on which imposition of penalty is proposed as he has a right to contest such proceedings and should have the full opportunity to meet the case of the revenue so as to show that the conditions stipulated in Section 271(1)(c) do not exist and that he is not liable to pay the penalty. The Hon‟ble High Court of Karnataka in the case law cited held that the practice of the revenue in sending the printed form where all the grounds mentioned in 271(1)(c) are mentioned would not satisfy the requirement of law when the consequence of the assessee not rebutting the initial presumption is serious in nature and has to pay the penalty ranging from 100% to 300% of the ....

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....223;ble high court held as under: "On principle, when penalty proceedings are sought to be initiated by the revenue under Section 271(1)(c) of the Act of 1961, the specific ground which forms the foundation therefore has to be spelt out in clear terms Otherwise, on assessee would not have proper opportunity to put forth his defence. When the proceedings are penal in nature resulting in imposition of penalty ranging from 100% to 300% of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club b....