2025 (2) TMI 978

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....ny and assessment was completed vide order dated 30.03.2015 by making various additions. Thereafter, the impugned order of penalty u/s 271(1)(c) of the Act was passed wherein penalty of Rs. 15,64,288/- was levied u/s 271(1)(c) of the Act for furnishing inaccurate particulars of income. During the course of hearing, the Ld. AR of the assessee submit that at the time of initiation of the proceedings u/s 271(1)(c) of the Act, notice was issued to the assessee vide notice dated 30/03/2015. The said notice is reproduced as under: 30/03/2015 To Shree Krishna Vanaspati Industries Pvt. Ltd. Manish Plaza, 20, Ansari Road, Darya Ganj, New Delhi-110002 Whereas in the course of proceedings before....

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.... concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1,2,3,4, and 5. You are hereby requested to appear before me at 04.30 P.M on 04/09/2015 and show cause why an order imposing a penalty on you should not be made under section 271 of the income Tax Act. 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271 Vinod Kumar Income Tax Officer, Ward-23(3), New Delhi" 3. Ld. AR submit that from the perusal of the both notices it could be seen that i....

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....cealed the income or furnished inaccurate particulars of his income. From the perusal of both the notices issued u/s. 274(1) r.w.s.271(1)(c) of the Act as reproduced above, it was not specifically pointed out as to whether the assessee has concealed the particulars of income or furnished the inaccurate particulars of income. Therefore, the penalty proceedings initiated without recording the satisfaction is liable to be quashed. In this regard, reliance can be placed on the decision of the Hon'ble Apex Court in case of M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248 (SC) wherein the Hon'ble Supreme Court has dismissed the Special Leave Petition filed by the Revenue against the judgment rendered by Hon'ble High Court of Karnatak....

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....ssee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it 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 income. The Tribunal, while allowing the appeal of the assessee, has relied on the derision of the Division Bench of this Court rendered in the case of COMMISSIONER or INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, ....

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....ment, 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 clauses would lead to an inference of non-application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also noticed that where the Assessing Officer issues notice under section 274 of the Act in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. Accord....