TaxTMI 
TaxTMI 
2021 (8) TMI 1182
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....come-tax Act, 1961 (for short 'the Act') qua the Assessment Years 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13 respectively on the identical grounds except the difference of amount of penalty levied by the AO and confirmed by the ld. CIT (A) inter alia that :- "1. That the Ld. CIT (Appeal) has erred in upholding the penalty (Rs. 10,14,082/-, Rs. 35,844/-, Rs. 30,900/-, Rs. 30,900/- & Rs.,30,900/- for AYs 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13) imposed by the AO, invoking the provisions of sec 271(1)( c) of IT Act 1961. 2. That the Ld. CIT (Appeal) has erred in upholding the penalty (Rs. 10,14,082/-, Rs. 35,844/-, Rs. 30,900/-, Rs. 30,900/- & Rs.,30,900/- for AYs 2008-09, 2009-10, 2010-11, 2011-12 & 2012-13) without considering the facts and circumstances of the case and relying on irrelevant judicial pronouncements. 3. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence." 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment orders all dated 20.06.2014 framed u/s 153A of the Act for AYs 2008-09, 200....
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....tional ground sought to be raised by the assessee, which is a legal ground and can be raised at any stage of the proceedings, is otherwise necessary for complete adjudication of the controversy at hand, the application for additional ground is hereby allowed. 8. Ld. AR for the assessee challenging the impugned orders contended inter alia that in order to initiate the penalty proceedings, the AO has failed to specify in the show-cause notice issued u/s 271(1)(c)/274 of the Act if the assessee has concealed the particulars of income or has furnished inaccurate particulars of income and relied upon the decisions of Hon'ble Karnataka High Court in CIT vs. SSA's Emerald Meadows -73 taxmann.com 241 (Kar.) (Revenue's SLP dismissed in 242 taxman 180) and Hon'ble High Court of Delhi in Pr. CIT vs. Sahara India Life Insurance Company Ltd. in ITA 475/2019 order dated 02.08.2019; and that all these appeals are covered by assessee's group company cases which were also searched during search and seizure operation conducted on 06.09.2011, whereby penalty levied has been deleted by the coordinate Bench of the Tribunal in case of ITA No5090, 5091& 5092/Del/2017 for AYs 2010-11, 2011-12 & 2012-13....
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.... notices issued u/s 274 read with section 271(1)(c) of the Act, extracted above in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for "concealment of particulars of income" or "furnishing of inaccurate particulars of such income" by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. 12. Hon'ble Apex Court in case of CIT vs. SSA's Emerala Meadows - (2016) 73 taxmann.com 248 (SC) while dismissing the SLP filed by the Revenue quashing the penalty by the Tribunal as well as Hon'ble High Court on ground of unspecified notice has held as under:- "Section 274, read with section 271(1)(c), of the Income-tax Act, 1961 - Penalty - Procedure for imposition of (Conditions precedent) - Assessment year 2009-10 - Tribunal, relying on decision of Division Bench of Karnataka High Court rend....
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....oncealing particulars of income or furnishing inaccurate particulars of such income, penalty proceedings have been sought to be initiated rather written vague and ambiguous satisfaction by recording that, "penalty proceedings u/s 271(1)(c) are initiated". So, initiating penalty proceedings on the basis of vague and ambiguous satisfaction rather "no satisfaction" are bad in law and as such not sustainable. 16. Identical issue as to levy the penalty on the basis of identical additions has already been decided by the coordinate Bench of the Tribunal in case of Radhika Surgical Pvt. Ltd. (supra) in favour of the assessee's group company which was also searched during the search and seizure operation conducted on o6.09.2011 by returning following findings :- "8. We have heard the rival submissions and perused the material on record. The issue in the present ground is with respect to levy of penalty under section 271(1)(c) of the Act. We find that the identical issue arose in the case of the assessee in A.Y. 2008-09 and the Co-ordinate Bench of Tribunal in ITA No. 5088/Del/2017 for A.Y. 2008-09 vide order dated 21.01.2021 has deleted the penalty by observing as under: ....
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.... rate of 100% of the tax sought to be evaded on the amounts confirmed in first appeal. ............. 7. We have heard both the parties and perused all the relevant materials available on record. First of all, in the notice issued u/s 274 r.w.s 271(1)(c) of the Income Tax Act, 1961, there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income. From the notice dated 20/06/2014 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee's case. Besides this, the present case is relating to search conducted by the Revenue in the premises of the assessee, while the decision relied by the Assessing Officer as well as CIT (A) that of Hon'ble Supreme Court in case of Mak Data P. Ltd. vs. CIT 358 ITR 593 is relating to survey and there is no issue involved about the notice issued u/s 271(1)(c) r.w.s. 27....
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.... that mere nonstriking off of the inappropriate words will not invalidate the penalty proceedings, however, the decision of the Hon'ble Karnataka High Court in the case of SSA'S Emerald Meadows (supra) where the SLP filed by the Revenue has been dismissed is directly on the issue contested herein by the Assessee. Further, when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon'ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. (supra) will be applicable in the present case. The Hon'ble Delhi High Court held as under: "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the ....