TMI Blog2019 (3) TMI 696X X X X Extracts X X X X X X X X Extracts X X X X ..... e else could make out as to whether the notice u/s. 274 r.w.S. 271 of the Act was issued for concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with the case of the Assessing Officer. There are a catena of judgments highlighting the necessity for identifying the charge for which the assessee is being visited and in all those decisions, Hon'ble Courts have repeatedly held that where the jurisdictional notice is vague, similar to the one in the present case, the consequent levy cannot be sustained. See MS. NEHA SHARMA VERSUS I.T.O., WARD 2 (3). JAIPUR. [2019 (3) TMI 599 - ITAT JAIPUR] - Decided in favour of assessee. - ITA No. 176/JP/2018 - - - Dated:- 8-3-2019 - Shri Ramesh C Sharma, AM And Shri Vijay Pal Rao, JM For the Assessee : Shri S.R. Sharma (CA) For the Revenue : Shri Rajendra Singh (JCIT) ORDER PER: R.C. SHARMA, A.M. This is an appeal filed by the assessee against the order of ld.CIT(A)-3, Jaipur dated 07/12/2017 for the A.Y. 2010-11 in the matter of imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act). 2. The only grievance of the assessee relates to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. The ld AR Mr. S.R. Sharma, C.A. appeared on behalf of the assessee and submitted that the penalty is bad in law as notice issued u/s 271 (1) (c) of the Act is improper and invalid. Our attention was drawn to the assessment order the A.O. held in para 8.3 of the order that penalty proceedings u/s 271(1)(c) of the Act is initiated for furnishing the inaccurate particulars of income and concealment of income and at the bottom of the assessment order issue penalty notice u/s 271 (1) (c) of the Act for concealment of income / inaccurate particulars of income. In the assessment order thus there is no satisfaction that whether the penalty is initiated for concealment of income or furnishing of inaccurate particulars of income. 5. Our attention was also invited to the notice issued U/s 274 read with Section 271 of the Act wherein it was stated that the penalty is imposable as the assessee had concealed particulars of income or furnished inaccurate particulars of income. 6. In view of the above, it was submitted that notice issued under section 274, read with Section 271 (1) (c) of the Income Tax Act, 1961, should specify under which limb of Section 271(1)(c) of the Act, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iculars of income and concealed the income to the extent of ₹ 1,46,37,002/-. Therefore, the initiation and imposing of penalty proceedings is wrong, bad in law, invalid and void ab initio. For the reasons that now there is a settled law position on the issue that the notice u/s 271 should be specific on imposing of penalty u/s 271 (1) (c) of Income Tax Act, 1961 i.e. concealed particulars of income or furnishing inaccurate particulars of income. For this proposition, reliance was placed on the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. M/s SSA s EMERALD MEADOWS reported in 2015 (11) TMI 1620 - , wherein Hon'ble Court has held that: - 3. The Tribunal has allowed the appeal filed by the assessee 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 t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inaccurate particulars of income. I, therefore, consider it a fit case for levy of penalty u/s 271 (1) (c) Hon'ble Gujarat High Court in the above case held that, where the Assessing officer in order of penalty did not come to a clear finding regarding the penalty being imposed on concealment of income or on furnishing inaccurate particulars of income, the Tribunal was justified in setting aside the impugned penalty order. Hon'ble Gujrat High Court followed the ratio laid down in the case of New Sorathia Engg. Co. [2006] 282 ITR 642 (Guj-High Court). 5 (ii) The above ratio laid down in the case of Manjunatha Cotton Ginning Factory Supra) has been followed by various High Courts in the below mentioned cases: (a) Shri Samson Perinchery. ITA 1154, 953, 1097, 1226 of 2014 (Order date 5.01.2017) (Bombay High Court) (b) SSA s Emerald Meadows [2016] 73 taxmann.com 241 (Karnataka High Court) (c) Mitsu Industries Ltd. ITA No. 216 of 2004, Gujarat High Court . 10. Reliance was also placed on the decision of the Hon ble Jurisdictional High Court of Rajasthan in the case of Shevata Construction Co. Pvt. Ltd. ITA No. 534/2008, wherein the Hon'ble High Court at Pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed by the A.O.. Therefore, it appears that the assessee has nothing to say and has no objection regarding imposing the penalty us/ 271 (1) (c) of I. T. Act, 1961. Therefore, I impose a penalty of equal to 100% of tax sought to be evaded on account of the above acts of the assessee of ₹ 34,05,436/- i.e. 100% tax evaded. In the light of the above, we need to examine whether assessment order and the penalty order comply with the provisions of section 271 (1) (c) of the Act. We find that on page 3 of the assessment order, the assessing officer, A.O. observed as under: - As the assessee has concealed/furnished the inaccurate particulars of income therefore, penalty u/s 271 (1) (c) is also initiated. 3.3 As per section 271 (1) (c), the assessing officer is empowered to impose penalty if in the course of any proceedings under this Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income. From the above provision it is clear that there has to be a specific satisfaction by the Assessing officer that the assessee is guilty of concealing the particulars of his income or furnishing inaccura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71 (1) (c) are mentioned or where show cause notice u/s 271 (1) (c) for imposing of penalty without specifying the limb for reasons to impose penalty whether for concealment of income or furnish inaccurate particulars of income is not as per law and assessing officer did not have any jurisdiction to impose penalty u/s 271 (1) (c). In the case(s) Radha Mohan Maheshwari Vs. DCIT (ITA No. 773/JP/2013) Mohd. Sharif Khan Vs. DCIT (ITA No. 441/JP/2014) Shankar Lal Khandelwal Vs. DCIT (ITA No. 878/JP/2013) Murari Lal Mittal (ITA No. 334/JP/2015 order dated 9-11-2016 and Mridula Agarwal (ITA No. 176/JP/2016) the Hon'ble Bench upheld the same view. 14. Even on merits also, it was contended by the ld AR that no penalty is warranted in so far as the assessee in return filed u/s 153A declared capital gain on the basis of consideration received as specified in registered sale deed. In course of search no material or evidence or incriminating material was found which could establish that assessee received any amount as on-money over and above the consideration specified in registered sale deed. The A.O. taking into consideration the statement recorded in course of search from grand father ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otice so issued that the Assessing Officer had levied charge of concealed the particulars of income or furnished inaccurate particulars of such income. In view of the judicial pronouncements discussed hereinbelow, the notice issued under section 274, read with Section 271 (1) (c) of the Income Tax Act, 1961, should specify under 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. In the absence of which no penalty should be levied on the assessee as determination of such limb is sine qua non for imposition of penalty under section 271 (1) (c) of the Act. 16. There can be no doubt that penalty u/s. 271(1)(c) of the Act is levied for concealing particulars of income or for furnishing inaccurate particulars of such Income, which are the two limbs of this provision. In other words, it is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from the notice issued ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] 292 ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of Manu Engineering Works reported in [1980] 122 ITR 306 (GUJ) and the Delhi High Court in the case of CIT v. Virgo Marketing P Ltd reported in [2008 171 Taxman 156 has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment then the notice has to be appropriately marked Similar is the case for furnishing inaccurate particulars of income. (p) Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c) i.e. whether it is for concealment of income or for furnishing of incorrect particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to nonapplication of mind. 19. Thereafter, in so far as the manner in which the statutory notice was required to be issued, the Hon'ble Court concluded thus: (p) Notice u/s 274 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unatha 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 no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed. 23. The SLP filed by the department in the aforesaid case also was dismissed by the Hon'ble Supreme Court vide Petition for Special Leave to Appeal (C) No .... ./2016 (CC No. 11485/2016) dated 05.08.2016. 24. The Hon ble Bombay High Court in the case of CIT v. Shri Samson Perinchery [Income Tax Appeal No. 1154 of 2014 and others dated 05.01.2017] had also occasion to consider a similar issue. In this case, though proceedings u/s. 271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income, in the notice issued u/s. 274 r.w.s. 271 of the Act in the standard form, the charge for which it was issued was also not identified, as in the present case. In deleting the levy, so far as non-specification of the default in the jurisdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: 7 Therefore, the issue herein stan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Andhra Pradesh High Court which virtually considered the subsequent law and the law which was prevailing on the date the decision was rendered on 27.08.2012. In view of the observation made in the said judgement, we are of the opinion that the contention raised by the appellant is required to be accepted and in the finding of Assessing officer in the assessment order it is held that the A.O. has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order . 27. Applying the proposition of law laid down by the various Hon'ble High Courts including the Hon ble Jurisdictional High Court, we do not find any merit for the penalty so imposed, accordingly, AO is directed to delete the penalty so imposed u/s. 271(1)(c) of Act. 18. Following the reasoning given therein, we do not find any merit for the penalty so imposed, accordingly, AO is directed to delete the penalty so imposed u/s. 271(1)(c) of Act. 19. In the result, appeal of the assessee is allowed. Order pronounced in th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
