2021 (3) TMI 1231

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....the said notice, the Assessing Officer has stated as under: " *** have concealed the particulars of your income or furnished inaccurate particulars of such income, Penalty proceedings u/s.271(1)(c) is hereby initiated." 4. He submitted that it is not clear from the said notice issued u/s.274/271(1)(c) of the Act by the Assessing Officer whether the show cause is issued to the assessee for concealment of particulars of income or for furnishing inaccurate particulars of income. He relied on the following judgments :-  i) CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565; ii) Jeetmal Choraria Vs. ACIT, Circle-43(Kol), ITA No.956/Kol/2016; iii) CIT Vs. SSA Emerald Meadows, ITA No.380/2015, iv) Gaganbihari Satrusalya Vs. DCIT, Cir-2(1), BBSR, ITA No.458/CTK/2017; and v) CIT Vs. Reliance Petro Products Pvt. Ltd., 322 ITR 158 In addition to the above, he also relied on the judgments submitted before the authorities below. 5. He submitted that the Hon'ble Supreme Court in the case of CIT vs. SSA's. Emerald Meadows dated 11th January, 2017 passed in Special Leave to Appeal (CC No.11485/2016)/73 taxmann.com 248 ....

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....explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2 Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in. holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is had in law and. invalid in spite the amendment of Section 271(1 B) with retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under S....

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....ction 274 of the Act without striking of the irrelevant clauses would lead to an inference of non-application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT, 291 ITR 519 (SC) has also noticed that where the Assessing Officer issues notice under section 274 of the Act in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. According to the Hon'ble Supreme Court, in such a situation, levy of penalty suffers from non-application of mind. In the background of the aforesaid legal position and, having regard to the manner in which the Assessing Officer has issued notice under section 274 r.w.s. 271(1)(c) of the Act, all dated 26.12.2017 for the respective assessment years under consideration without striking off the irrelevant words, the penalty proceedings show a non-application of mind by the Assessing Officer and is, thus, unsustainable. 11. The facts of the present appeal are identical to the....

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....llant and learned counsel for the respondent. By way of this Appeal, the appellant-assessee has challenged the judgment and order of the Tribunal whereby the Tribunal has dismissed the Appeal imposing penalty. Learned counsel for the appellant referring to the recording in the assessment order with the hand written contended that the Assessing Officer has initiated a proceeding only under Section 271(1)(c) of the Income Tax Act, 1961 and notice came to be issued was in printed form wherein it has not been stated whether it was concealment of income or inaccurate income. Learned counsel for the appellant relied upon the decision of the Karnataka High Court in the case of Commissioner of Income Tax and another versus 1. Manjunatha Cotton and ginning factory, 2. Manjunath Ginning and pressing, 3. Veerabhadrappa Sangappa and Co., 4. V.S. Lad and sons, 5. G.M. Exports as reported in [2013] 359 ITR 565 (Karn.) relying on the decision of the Hon'ble Supreme Court in CIT v. Reliance Petroproducts P.Ltd. : (2010) 322 ITR 158 (SC) paragraphs 35 & 46. However, considering that the respondent disputed the same and relied upon two decisions of the Hon'ble Sup....