TaxTMI 
TaxTMI 
2026 (7) TMI 891
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....e revolves around the penalty u/s 271(1)(c) of the Act at Rs. 30,00,000/-. 3. At the outset, Ld. Counsel for the assessee raising a legal issue referring ground no.1 submitted that show cause notice dated 07.07.2014 issued u/s 274 r.w.s 271(1)(c) of the Act is defective as the Ld. AO failed to specify the specific charge of default committed by the assessee by not striking off the limb which was not applicable to the facts of the case that whether the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. He submitted that in absence of initiating the penalty proceedings without levelling specific charge against the assessee, the penalty proceedings deserve to be quashed as void ab initio in ....
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....notice u/s 274 of the Act placed as (paper book page 19): 6. On perusal of the above show cause notice we note that Ld. AO has referred to both the charges namely "concealed the particulars of income" or "furnished inaccurate particulars of income" and has failed to strike off one of the charge not applicable to the assessee namely "concealed the particular of income." 7. Under similar set of facts, we note that this tribunal in the case of Dhanjraj Distributors Pvt. Ltd. vs. DCIT(supra) after duly examining the facts identical to the facts of the present case and placing reliance on the judgment of Hon'ble Jurisdictional High Court in the case of Kulwant Singh Bhatia (supra) has quashed the penalty proceedings observing as follows: ....
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....ars of such income" 5. Ld. AR submitted that the notice u/s 274 sets in motion the penalty- proceeding. According to Ld. AR, the notice dated 07.12.2007 issued by AO is very much vague in as much it contains stereotype language of section 271(1)(c). The Ld. AR contended that by saying that the assessee has "concealed the particulars of income" or "furnished inaccurate particulars of income", the AO is himself not sure about the default committed by the assessee. According to Ld. AR, there are innumerable decisions of the Hon'ble Courts and ITAT where it has been loudly held that if the show- cause notice does not spell out the specific charge of default committed by assessee, the notice and subsequent proceeding founded thereon....
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....C) / dated 23.11.2015 (ITA 380/2015), the High Court has dismissed the appeal of the revenue by observing that the Tribunal has allowed the appeal of the assessee holding that the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Act of 1961 was bad-in-law as it did not specify which limb of Section 271(1)(c) of the Act of 1961, the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars. The Tribunal while allowing the appeal of the assessee, had relied on the decision of the Division Bench of Karnataka High Court decision in the case of CIT V/s.Manjunatha Cotton Ginning Factory (supra). It is further pointed out that th....
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....y-order passed by AO is totally invalid. 7. Ld. DR, though could not contradict the applicability of decision of Hon'ble jurisdictional High Court on facts and in law, strongly supported the penalty-order passed by AO. 8. We have considered rival submissions of both sides and perused the case-records including the show-cause notice and order of penalty made by AO in the light of decision of Hon'ble Jurisdictional High Court. On perusal of the show-cause notice issued by AO, we observe that the notice contains both of the charges viz. "concealed the particulars of income" or "furnished inaccurate particulars of income" and the AO has not stricken-off any one. Therefore, the whole proceeding of penalty conducted by t....
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....raised by the assessee, adjudication of merits of the case would be merely academic in nature. Therefore, ground no.2 is dismissed as infructuous. 10. In the result, the appeal of the assessee is allowed as per terms indicated hereinabove. Order was pronounced in the open court on 10th July, 2026. ============= Document 1 -- Govi of India OFFICE OF THE INCOME TAX OFFICER, KHARGONE Aayakar Bhawan, Umarkhall Road, Khargone (M.P.) NOTICE UNDER SECTION 271(1)(c) READ WITH SECTION 274 OF INCOME TAX ACT, 1961 I.T.N.S.29 PAN: AAOPT4070B 321/09/07/14 Dated: 07-07-2014 To, SHRI Dwarkaprasad Tayal, Prop:Monika Trading Company & Prop: White Gold Enterprises, 4, Jawahar Ganj, Sendhwa Sir/Madam, Whereas in the course o....