TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 884
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....ls according to law. The appellant craves leave to add, amend or alter the grounds of appeal at or before the time of hearing." 2. Briefly stated, the assessee had filed his return of income for A.Y. 1997-98 on 01.06.1998, declaring a total income of Rs. 20,140/-. The return of income was initially processed as such u/s 143(1) of the Act. Subsequently, a base note was received by the Government of India from the French Government under the Indian-France Double Taxation Avoidance Agreement (DTAA), wherein it was intimated that the assessee was one of the Indian national who was holding a foreign bank account with HSBC Bank, Geneva, Switzerland. Backed by the aforesaid information received by the A.O the case of the assessee was reopened u/s 147 of the Act. After necessary deliberations the A.O after inter alia making an addition of the investment of Rs. 27,50,000/- equivalent to CHF 1,00,000/- (1 CHF = 27.50 INR), therein, vide his order passed u/s 143(3) r.w.s 147 of the Act, dated 23.01.2015 assessed the income of the assessee at Rs. 27,70,134/-. At the time of culminating the assessment penalty proceedings u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of in....
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....r other, or both grounds mentioned in Sec. 271(1)(c) of the Act, a mere defect in the show cause notice on account of the failure on the part of the A.O in not striking off the irrelevant matter would vitiate the penalty proceedings. Accordingly, in the backdrop of his aforesaid contentions, it was submitted by the ld. A.R that as the A.O in the present case had invalidly assumed jurisdiction and imposed penalty u/s 271(1)(c) of the Act, therefore, the same could not be sustained and was liable to be vacated. 6. Per contra, the ld. Departmental Representative (for short 'D.R') relied upon the orders passed by the lower authorities. It was submitted by the ld. D.R that as the assessee was afforded sufficient opportunity in the course of the penalty proceedings, therefore it was incorrect on his part to claim that no opportunity of being heard was afforded to him in the course of the penalty proceedings. 7. We have heard the ld. Authorized Representative for both the parties, perused the orders of the lower authorities and the material available on record, as well as considered the judicial pronouncements that have been pressed into service by the ld. A.R to drive home his aforesai....
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....formality but is a statutory obligation cast upon him, which we are afraid had not been discharged in the present case as per the mandate of law. 9. We would now test the validity of the aforesaid 'Show Cause' notice and the jurisdiction emerging therefrom in the backdrop of the judicial pronouncements on the issue under consideration. Admittedly, the A.O is vested with the powers to levy penalty under Sec. 271(1)(c) of the Act if, in the course of the proceedings he is satisfied that the assessee had either 'concealed his income' or 'furnished inaccurate particulars of his income'. In our considered view, as penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed on him. The non specifying of the charge in the 'Show cause' notice not only reflects the non-application of mind by the A.O, but the same seriously defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1) of the I.T Act. We find that the fine distinction between th....
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....s. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Kar) had held, that where the notice issued by the A.O under Sec. 274 r.w Sec. 271(1)(c) does not specify the limb of Sec. 271(1)(c) for which the penalty proceedings had been initiated, i.e. whether for 'concealment of particulars of income' or 'furnishing of inaccurate particulars', the same has to be held as bad in law. The 'Special Leave Petition' (for short 'SLP') filed by the revenue against the aforesaid order of the Hon'ble High Court of Karnataka had been dismissed by the Hon'ble Supreme Court in CIT Vs. SSA's Emerald Meadows (2016) 73 taxmann.com 248 (SC). Apart from that, we find that a similar view had been taken by the Hon'ble High Court of Bombay in the case of CIT Vs. Samson Perinchery (ITA No. 1154 of 2014; Dt. 05.01.2017)(Bom). 11. We find that the indispensable obligation on the part of the A.O to clearly put the assessee to notice of the charge under the aforesaid statutory provision viz. Sec. 271(1)(c), as pointed out by the ld. A.R, had been deliberated at length by a 'Full bench' of the Hon'ble High Court of Bombay in the case of Mohd. Farhan A. Shaikh Vs. Dy. Commissioner of Income Tax, Central Cir....