2022 (1) TMI 1208

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....red in rejecting ground No. 1 of the appeal that "in view of the explicit provision of section 292B of the Act, this ground no. I & 2 of the appeal are rejected after considering the various judicial pronouncements relied upon by the appellant during the course of appellate proceedings which are not found to be squarely applicable to the facts Of the appellant's case", by wrongly stating that the show cause notice dated 27/02/2017 (wrongly mentioned as 22/02/2017) did not mention anything about the first notice (i.e. notice dated 03/03/2015) which all suggested that company has concealed the particulars of income rather than furnishing of inaccurate particulars of such income and the said finding is not emerging either from notice dated 03/03/2015 or 27/02/2017, the decision based on such erroneous consideration is perverse. Further the Ld.CIT (A) has erred in invoking & applying the provisions of section 292B of the Act, non application of mind by lower authorities which is not a curable mistake within the meaning of section 292B of the Act. 3) In law and on facts as well as in the circumstances of the assessee's case, the Ld.CIT (A) has further erred in deriving ....

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....nder consideration. Thus, the excess provision of Rs. 87,72,108/- [ 2,59,83,195 -(82,21,506+90,54,581) ] is to be offered to tax. The assessee had not offered. The discrepancy was brought to the knowledge of the assessee. The assessee vide letter dated 18/2/ 15 had submitted its revised calculation in which the amount of Rs. 91,96,966 is added to the income of the assessee as excess provision of bad debt is written back. Penalty proceedings u/s.271(1)(c) of the I.T.Act are initiated for furnishing inaccurate particulars of income." 7. Consequent to the decision of the quantum appeal decided by "the Ld. CIT(A) the assessing officer proceeded to levy the penalty as initiated in the assessment order in respect the addition of Rs. 91,96,966/- as confirmed by the CIT(A) in his appellate order. 8. In the order of penalty passed on 15-03-2017, the assessing officer has considered the arguments of the assessee which was on technical ground as well as on merits. All the submission of the assessee are incorporated in the penalty order. The assessee mainly argued before the assessing officer that the notice is invalid and is not having the ground on which the penalty is proposed. The se....

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....count of error in computation of provision of bad debts to the extent of Rs. 91,96,966/-. Thus, there is not concealment of income or providing of any inaccurate particulars of income. 10. While disposing the penalty appeal of the assessee "the Ld. CIT(A) has given a detailed finding on the technical grounds raised by the assessee and the same is reproduced here in below as point (a) and observation on arguments on merits in (b) for the sake of brevity of the facts of the case. (a) Finding of the Ld. CIT(A) "from para 3.2 page 12" last line on page 12 for technical ground " ..........Thus, the A. O. did not erred in concluding the penalty proceeding by deriving specific satisfaction over the appellant's failure to furnish inaccurate particulars besides attempting to conceal the particulars of income. Thus, in view of these explicit provision of section 292BB of the Act, this ground no 1 & 2 of the appeal are rejected after considering various judicial pronouncements relied upon by the appellant during the course of appellate proceedings which are not found to be squarely applicable to the facts of the appellant's case." (b) Finding of the Ld. CIT(A) "f....

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....med. 10.1 Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 11. The AR of the of the assessee argued that there is no jurisdiction and as well as clear finding of the assessing officer to impose penalty u/s 271(1)(c) of the Act. He stated before us that the penalty notice issued u/s. 274 r.w.s. 271(1)(c) of the Act dated 03.03.2015, a copy of which has been placed on page 37 of paper book no. Part-I filed by the assessee, there is non-application of mind while issue of notice and it is in standard format and the irrelevant portion of notice has not been struck off. 12. The AR of the assessee in his paper book extracted the relevant portion from the, assessment order, original notice dated 03.03.2015 and finding of the assessing officer while levying the penalty. He has thus, stated that at the time of initiating penalty proceeding, there was no clear finding by the A.O. whether the assessee is guilty of concealing the income and/or furnishing inaccurate particulars of income. The AR of the assessee further contended that the AO has issued notice without recording his proper finding in the notice dated 03.03.2015 and thus, the requireme....

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....alty order as well as also on the decision cited by the CIT(A). He has also relied upon the finding of the CIT(A) on the alleged defect in issue of notice pointed out by the AR of the assessee. 15. Thus the learned DR submitted that the assessing officer pointed out his intention to levy penalty has already been communicated in the assessment order para 4. Therefore, non-striking off the irrelevant portion in the notice u/s. 274 r.w.s. 271(1)(c) of the Act dated 03.03.2015 does not create any ambiguity as the assessee was well aware that the proceedings have been initiated for furnishing inaccurate particulars of income. It was also contended that section 292 BB of the Act saves the error if any in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act and, therefore, the plea of the assessee is not justified and thus he has stated that mentioning of an incorrect charge in the notice of penalty would not render the penalty proceedings void-ab-initio. 16. In reply, the learned representative for the assessee pointed out that nonstriking off of irrelevant portion of the standard form of notice u/s 274 r.w.s. 271(1)(c) of the Act is a legal infirmity, which is fatal to the imposi....

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....ing inaccurate particulars of such income. Such cannot be the interpretation of the concerned words. The words are plain and simple. In order to expose the assessee to the penalty unless the case is strictly covered by the provision, the penalty provision cannot be invoked. By any stretch of imagination, making an incorrect claim in law cannot tantamount to furnishing of inaccurate particulars. [Para 7] Therefore, it must be shown that the conditions under section 271(1)( c ) exist before the penalty is imposed. There can be no dispute that everything would depend upon the return filed, because that is the only document, where the assessee can furnish the particulars of his income. When such particulars are found to be inaccurate, the liability would arise. [Para 8] The word 'particulars' must mean the details supplied in the return, which are not accurate, not exact or correct, not according to truth or erroneous. In the instant case, there was no finding that any details supplied by the assessee in its return were found to be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under section 271(1)(....