TaxTMI 
TaxTMI 
2021 (12) TMI 755
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....71(1)(c) of the Income-tax Act, 1961 (for short 'the Act') qua the assessment year 2012-13 on the grounds inter alia that :- "1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in confirming the action of Ld. AO in imposing penalty u/s 271(1)(c) of Rs. 13,88,112/- and that too without assuming jurisdiction as per law and the impugned penalty order being illegal and void ab-initio and without considering the submissions of assessee and without observing the principles of natural justice. 2. That in any case and in any view of the matter, action of Ld. CIT(A) in confirming the action of Ld. AO in imposing penalty u/s 271 (1)(c), is bad in law and against the facts and c....
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....eved by the order passed by the ld. CIT (A), the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Undisputedly, the entire addition has been made by the AO/confirmed by the ld. CIT (A) on the basis of estimated net profit @ 8% of the turnover by following his own order for Assessment Year 2010-11 which has since been set aside and net profit has been estimated @ 3% of the turnover. It is also not in dispute that following the order passed by the coordinate Bench of the Tribunal ....
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....of the Act to initiate the penalty proceedings which is extracted as under for ready perusal:- "F.NO.271(1)(c)/DCIT/Circle-1/GZB/2014-15/2253 Dt.05.02.2015 NOTICE UNDER SECTION 274 WITH SECTION 271 OF THE INCOME TAX ACT, 1961. To Shri Alok Garg, Prop. Alok Builders, R-11/125, Raj Nagar, Ghaziabad. Whereas during the course of proceedings before me for the assessment year 2012-13 it appears to me that you:- * Have without reasonable cause failed to furnish merturn of income which you were required to furnish by a notice given under section 139(1) or by a notice given u/s 139(2)/148/142(1) of the Income Tax Act, 1961 dated......... or have without reason....
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....ainst 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. 10. 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 rendered in case of CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 1TR ....
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....x v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) , the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of2016 by order dated 5th August, 2016." 12. Following the decisions rendered in the cases of CIT vs. Manjunatha Cotton and Ginning Factory, CIT vs. SSA's Emerala Meadows and Pr. CIT vs. Sahara India Life Insurance Company Ltd. (supra), we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. 13. Even the AO has failed to apply his mind at the time of recording satisfaction at the time of framing ass....
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.... be clear that there was an estimate at the level of the AD as well as at the level of Tribunal in respect of receipts as well as net profit rate. The above facts clearly show that the income of the assessee was estimated and nothing has been brought on record by the AO that the assessee concealed any particulars of income or furnished inaccurate particulars of income, It cannot be said that the addition made in the hands of the assessee was on account of any concealment by the assessee. Therefore, the provisions of s. 271(1)(c) were not applicable to the facts of the present case. It cannot be said that in the case of assessee there was any fraud or gross willful neglect to return the correct income. In that view of the matter also the pen....