TaxTMI 
TaxTMI 
2022 (8) TMI 896
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.... Penalty amounting to Rs.84,297/- imposed by the Ld. A.O. under section 271(1)(c) of the Income Tax Act, 1961. 4) That the Ld. C.I.T(Appeals)-I, Kanpur has erred in law and on facts by sustaining the Penalty amounting to Rs.84,297/- imposed by the Ld. A.O. under section 271(1)(c) of the Income Tax Act, 1961, which is wholly unjustified, without proper basis, too high & deserves to be deleted. 5) That the order of the Ld. C.I.T. (Appeals)-I, Kanpur is insupportable in law and on facts and is also contrary to the principles of natural justice and equity. 6) That any other relief or reliefs as may be deemed fit in the case and circumstances of the case be granted. 2. The assessee has also raised an Additional Ground of Appeal, which reads as under: "7. That the show cause notice issued by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2014-15 did not mention the specific charge and limb against which penalty of Rs.84,297/- is proposed to be levied, therefore the impugned penalty order passed by the Assessing Officer and sustained by the ld. CIT(A)-1, Kanpur is liable to be quashed." 3. This Ad....
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....;ble Supreme Court in 99 Táxmann 152(SC). 7. Heard. The show-cause notice in question is as follows: 8. From a perusal of this notice, it is crystal clear that the charge for which penalty is proposed to be levied under section 271(1)(c) of the Act, whether for concealment of income, or for furnishing of inaccurate particulars of income, is not specific, inasmuch as the alleged charge reads: "....have concealed the particulars of your income or furnished inaccurate particulars of such income....". The law mandates that the authority, who is proposing to impose penalty, shall be certain as to the basis on which the penalty is being levied and the notice must reflect that specific reason, so that the assessee, to whom such notice is given, can prepare himself regarding the defence, which he would like to take to support his case. This is even enshrined in the principles of natural justice and as has been upheld by the Hon'ble Apex Court and various High Courts. 9. In 'CIT vs. SSA's Emerald Meadows', [2016] 73 Taxmann.com 248, the Hon'ble Apex Court looked into the facts before them that the Tribunal, relying on the decision of the Division Bench of the Hon'....
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....bs of section 271(1)(c) he has to respond to. 12. In 'Chandra Prakash Bubna vs. Income Tax Officer, Ward 27(3), Kolkata', (ITAT, Kolkata Bench) [2015] 64 taxmann.com 155, it was held that when the Assessing Officer levied penalty without bringing out any specific charge for which the penalty had been imposed, the penalty was liable to be deleted. 13. In 'Madan Lal Kishori Lal vs. CIT', 197 CTR (All) 144, the Hon'ble Allahabad High Court, following 'K.P. Madhusudanan' in Civil Appeal No. 6465/2000 (SC), has held that Explanation-1 to Section 271(1)(c) applies whether or not the Assessing Officer has invoked it in the order or in the notice. This judgment is not an authority for the issue presently under consideration before the Bench. The judgment explains the scope of Explanation- 1 appended to section 271(1)(c) of the Act. It has been held therein that the onus of the assessee will not get discharged by furnishing an explanation without any further proof; that in Explanation-1 to section 271(1)(c), the onus is on the assessee; that where the AO issues a notice to the assessee, he makes the assessee aware that the provisions thereof are to be used against him and these provis....
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....wide network in various financial services, should definitely be precluded from raising such a plea at this belated stage." 15. It is seen that the Hon'ble Madras High Court in 'M/s Sundaram Finance Ltd. vs. ACIT' (supra) nowhere disagreed with the view taken by the Hon'ble Karnataka High Court in 'CIT and Another vs. Manjunath Cotton & Ginning Factory' (supra). Rather, the matter was decided on the facts of the case, holding, inter alia, that the case of the Revenue against the assessee was that of concealment of income as well as that of furnishing of inaccurate particulars of income. Therefore, 'Sundaram Finance' (supra) is of no aid to the Revenue. 16. Moreover, in the present case, as against that in 'M/s Sundaram Finance Ltd. vs. ACIT' (supra), this issue had been raised by the assessee before the ld. CIT(A), and it has also been raised before us, contending that prejudice has been caused to the assessee and the charge against the assessee in the assessment order as well as in the penalty notice is nebulous and the assessee has remained unable to understand the purport and import of the notice issued under section 274 read with 271 of the Act. Therefore,....