2022 (3) TMI 1211

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.... of penalty u/s 271(1)(c) of the Act. 2. At the outset it was argued by the learned counsel for the Assessee that in the instant case the noticedated 25.03.2013 issued u/s 271(1)(c) read with section 274 of the Act is vague, as the same did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of incomeand therefore the penalty is not leviable. The Assessee in support of its contention also relied upon various judgments of the Hon‟ble Apex Court and of the Hon‟ble High Courts.For the sake of brevity, we are referring few: (i) CIT Vs. SSA‟S Emerald Meadows (2016) 242 Taxman ....

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....s Emerald Meadows (supra) decided by Hon'ble High Court of Karnataka is reproduced below:- "2. This appeal has been filed raising the following substantial questions of law: (1) Whether, omission if assessing officer to 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 bad i....

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....ed." 6. The Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar) observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. 7. Even the Hon'ble High Court of Delhi in the case of M/s. Sahara India Life Insurance Compa....