2025 (8) TMI 1040

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....Ld. AO vide order dated 12-03- 2018. The registry has noted minor delay of 19 days in the appeal which stands condoned. The Ld. AR, drawing attention to the factual matrix, referred to various judicial decisions to assail the impugned penalty. The copies of the judicial decisions have been placed on record. The Ld. Sr. DR also advanced arguments supporting impugned penalty on the assessee. Having heard rival submissions and upon perusal of case records, the appeal is disposed-off as under. Proceedings before lower authorities 2.1 From case records, it emerges that pursuant to search action on assessee on 29-09-2015, the assessee made surrender of cash and bullion. The assessee filed return of income declaring income of Rs. 326.90 Lacs....

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....the notice did not meet the requirement of law. Reference was made to the decision of Hon'ble High Court of Madras in the case of R. Elangovan (TCA Nos.770 & 771 of 2018) deleting penalty on similar facts. Similar was stated to be decision of Hon'ble High Court of Calcutta in the case of Industrial Safety Products Pvt. Ltd. (ITA No.88 of 2022). The assessee also referred to similar decision of Chandigarh Tribunal in the case of M/s Happy Steels Pvt. Ltd. (ITA No.398/Chd/2023 dated 05-06-2024) deleting penalty on similar grounds. Reference was made to various other decisions of Tribunal taking the same view and deleting the penalty on legal grounds. 2.3 The Ld. CIT(A) did not concur with the aforesaid submissions on the ground that rates ....

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.... the assessee has not been specified in the show-cause notice. It is trite law that a valid initiation of penalty proceedings under the act is sine-qua-non for validity of penalty proceedings. Before imposing penalty, there should be an application of mind by Ld. AO as to specific clause which was applicable to the case of the assessee. However, the notice so issued to the assessee do not show any such application of mind and is a vague notice. The notice does not specify the exact charge against the assessee and do not specify the relevant clause of Sec.271AAB as applicable to the case of the assessee. This being so, the impugned penalty could not be sustained in law on this score only. 4. The Chandigarh Tribunal, on identical facts, in....