TaxTMI 
TaxTMI 
2021 (7) TMI 665
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.... 14A, Rs. 7,62,258/- on account of disallowance u/s. 40A(3), Rs. 37,230/- on account of Excess claim u/s. 43B and Rs. 4,52424/- on account of disallowance of expenses u/s. 37(1), the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Income-tax Act and imposed penalty of Rs. 7,59,780/-. 3. Aggrieved by penalty order, the assessee preferred an appeal before the ld. CIT(A), and challenging the validity of the penalty notice issued under section 274 read with section 271 of the Act, the ld. AR contended that the learned Assessing Officer had omitted to specify the relevant charge that is, whether "concealment" or "inaccurate particulars" both in the assessment order and in the penalty notice thereby rendering the notice as ....
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....am Finance Ltd vs. CIT (2018) 403 ITR 407 (Madras), Ld. DR submitted that the assessee understood the purport of the notice and without raising any objection whatsoever they have participated in the penalty proceedings as well as the proceedings before the Ld. CIT(A) and, therefore, no prejudice was caused to the case of the assessee. She therefore, prayed to dismiss the appeal. 6. We have gone through the record in the light of the submissions made by ld. DR. It is an undisputed fact that the notice issued to the assessee does not specify the charge under which the penalty was proposed to be levied by the Assessing Officer. 9. In the case of CIT vs Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar),vide paragraph 60, the Hon'ble Karn....
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....e ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable." 10. In Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 taxman.com 241 (Kar) the Hon'ble Karnataka High Court Considered the question of law as to,- "Whether, ....
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....reme Court holding: "We do not find any merit in this petition. The special leave petition is, accordingly, dismissed." 13. In PCIT vs. Sahara India Life Insurance Company Limited case ITA No 475/2019 and batch order dated 02/08/2019, Hon'ble Delhi High Court, upheld the view taken by the Tribunal basing on the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory (supra) and SSA's Emerald Meadows (supra) wherein it was held that the notice issued by the learned Assessing Officer would be bad in law if it did not specify under which limb of section 271(1)(c) of the Act the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or for furnishing of inaccura....