TaxTMI 
TaxTMI 
2022 (7) TMI 324
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.... the case in confirming the order of the Assessing Officer of levying penalty though the initiation for penalty proceedings has been made vide notice dated 18.11.2015, which is defective in as much as the said notice was issued for furnishing inaccurate particulars of income or concealment of income and hence, deemed to be null and void. 3. The appeal against addition of Rs. 1,22,24,800/- has duly been admitted by the Hon'ble High Court of Gujarat vide order dated 17.12.2018 in Tax Appeal No. 1337 of 2018 on substantial question of law, and hence, levy of penalty is required to be deleted. 4. Your application prays to reserve the right to add, alter, amend and/or withdraw any of the above grounds of appeal." 3. The facts of the case which can be stated quite shortly are as follows: The assessee before us is an individual and filed his return of income for A.Y. 2012-13 on 28.09.2012, declaring total income for Rs. 2,51,380/-. The order under section 143(3) was passed on 27.08.2019 and the income was assessed at Rs. 2,56,380/- by adding lump sum addition on account of travelling expenses. Afterwards, the assessing officer had received information by central circle 2(4), Ahme....
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.... then in case of every return where the claim made is not accepted by AO for any reason, the assessee will invite penalty under Section 271(1)(c). That is clearly not the intendment of the legislature". 15. In view of the aforesaid decision, we do not find any good ground to differ with the view taken by the Tribunal and we are also of the opinion that no substantial question of law, as framed by the appellant in the appeal, requires determination by this Court." 6. The Ld. Counsel further argued that notice issued by the Assessing Officer under section 271(1)(c) of the Act is defective. The Defective notice is placed at paper book page no. 61. The Ld. Counsel, therefore pointed out that it is not certain whether assessee has been penalized for furnishing of inaccurate particulars of income or concealment of income, hence there is no definite charge imposed by the Assessing Officer by issuing notice under section 271(1)(c) of the Act, hence penalty should be deleted. 7. Apart from this, the Ld. Counsel also submitted that in the assessment order, the Assessing Officer has initiated the penalty proceedings on both the limbs, therefore initiation of penalty proceedings is itself ....
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....in case of Manu Engineering Works - 122 ITR 306 (Guj.) held. that the penalty order has to be clear as to limb for which it is levied and the position being unclear penalty is not sustainable. Further, on the identical facts, Hon'ble Gujarat High Court in case of Nayan C. Shah vs. ITO [Tax Appeal No. 543 of 2012 (Guj- HC)] held. as follows: "11. Another notable aspect of the matter is that while the Assessing Officer has imposed penalty on the ground that the assessee has furnished inaccurate particulars of income, the Tribunal has set aside the order of the Commissioner (Appeals) by holding that the assessee has suppressed the actual particulars of income by not making disallowance under section 40(a)(ia) of the Act. Thus, the Assessing Officer has imposed penalty on the ground of furnishing inaccurate particulars, whereas the Tribunal has upheld. the order of the Assessing Officer on the ground of concealment of particulars. It is by now well settled that while issuing a notice under section 271(1)(c) of the Act, the Assessing Officer is required to specify as to what is the default on the part of the assessee, as to whether the case is one of furnishing inaccurate particul....
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.... furnished inaccurate particulars of such income. "It was in this respect the Bench observed that "Now the language of "and/or" may be proper in issuing a notice as to penalty order or framing of charge in a criminal case or a quasi-criminal case, but it was incumbent upon the IAC to come to a positive finding as to whether there was concealment of income by the assessee or whether any inaccurate particulars of such income had been furnished by the assessee. No such clear cut finding was reached by the IAC and, on that ground alone, the order of penalty passed by the IAC was liable to be struck down." 5. A perusal of the above paragraph would indicate that the Hon'ble High Court found that user of expression "and/or" in between concealment of income or furnishing of inaccurate particulars while inviting explanation of the assessee, may not be any procedural irregularity or fatal to the proceedings, but if the AO failed to record a finding, while visiting the assessee with penalty, then that would be fatal to the proceedings itself. In other words, while passing final order, the AO has to record a specific finding exhibiting the fact that penalty is being imposed for furnishin....