TMI Blog2021 (11) TMI 325X X X X Extracts X X X X X X X X Extracts X X X X ..... e principles of natural justice and as has been upheld by Hon'ble Apex Court and other High Courts. In the present cases, unlike in the case of Sundram Finance Ltd [ 2018 (5) TMI 259 - MADRAS HIGH COURT] the assessee has taken this argument before learned CIT(A) and before us also whereas in Sundram Finance Ltd., the issue was raised for the first time before Hon'ble Supreme Court therefore, this case law is distinguishable from the facts of the present cases and therefore, is not applicable - ITA Nos.265 to 270/Lkw/2019, C.O.Nos.10 to 15/Lkw/2019 (in ITA Nos.265 to 270/Lkw/2019) - - - Dated:- 2-11-2021 - Shri A. D. Jain, Vice President And Shri T. S. Kapoor, Accountant Member For the Revenue : Smt. Sheela Chopra, CIT., D.R., Shri Ajay Kumar, D. R. For the Assessee : Shri Rakesh Garg, Advocate ORDER PER BENCH: These six appeals have been filed by Revenue against the order of learned CIT(A)-2, Lucknow dated 07/02/2019 pertaining to assessment year 2002-2003 and dated 11/02/2019 pertaining to assessment years 2003-04 to 2007-08. The Revenue has taken similar grounds in all these appeals which were heard together therefore, for the sake of con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... usal of this notice, it is crystal clear that the charge is not specific for which penalty is levied under section 271(1)(c) of the Act, whether for concealment of income or for furnishing of inaccurate particulars of income. The learned A.R. of the assessee vehemently argued that it is settled position of law that if notice under section 274 read with 271(1)(c) is not specific about the charge or limb under which penalty is being levied under section 271(1)(c) of the Act, then any penalty levied on the basis of such notice is bad in law and liable to be deleted. Learned counsel for the assessee placed reliance on the following case laws: i) PCIT vs. Sahara India Life Insurance Co. Ltd. ITA No. 475/2019 Order dt. 02.08/2019. ii) Pr.CIT (Central) vs. Goa Coastal Resorts Recreation Pvt. Ltd. ITA No. 24 of 2019 Order dt. 11.11.2019 High Court of Bombay at Goa. iii) International Tractors Ltd. vs. Dy.CIT ITA No. 6098/Del/2016 Order dt. 21.02.2020 ITAT, Delhi. iv) DCIT vs. Metro Tyres Pvt. Ltd.ITA No. 2874/Del/2016 Order dt. 24.06.2020 ITAT, Delhi. v) Radhika Surgical Pvt. Ltd. vs. ACIT ITA No. 5089/Del/2017 Order dt. 31.05.2021 - ITAT Delhi. vi) Singh Consultancy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court had decided the appeal on the merits of the case whereas in the present case, the issue regarding validity of notice has been raised before the authorities below therefore, learned CIT(A), after considering the legal position and after considering the decision of Hon'ble Apex Court in the case of SSA Emerald has held the notice issued u/s 271(1)(c) of the Act not a valid notice. It was submitted that the notice u/s 271(1)(c) is a jurisdictional notice and for levy of penalty, jurisdiction has to be assumed and for assuming jurisdiction, a valid notice has to be issued and if the notice itself is not valid, the Assessing Officer cannot assume jurisdiction and hence cannot impose penalty. Learned counsel for the assessee submitted that the case laws of Sundram Finance Limited has also been considered by the Lucknow Bench of the Tribunal in the case of Risha Tour and Travels vs. Income Tax Officer in I.T.A. No.606/Lkw/2018 vide order dated 23/01/2020 and after considering this decision, the issue has been decided in favour of the assessee and therefore, it was prayed that the order of learned CIT(A) be upheld. 5. We have perused the case records and heard the rival cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars of income. When the matter travelled upto the High Court, it supported the judgment of Hon'ble Karnataka High Court in the case of CIT and Another vs. Manjunath Cotton Ginning Factory (supra) and decided that there was therefore no substantial question of law to be decided. Thereafter an SLP was filed before the Hon'ble Apex Court and the Apex Court dismissed the SLP of the Revenue finding no merit therein and confirming the issue in favour of the assessee. (2) In CIT and Another vs. Manjunath Cotton Ginning Factory [2013] 359 ITR 565 (karn.). In this case, it has been clearly mentioned and held by the Hon'ble High Court that notice under section 274 read with section 271(1)(c) of the Act should specifically state the grounds mentioned in 271(1)(c) i.e. whether it is for concealment of income or for furnishing of inaccurate particulars of income. Sending printed form where all the grounds mentioned would not satisfy the requirement of law. Assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice is offended. On the basis of such proceedings no penalty could be imposed to the assessee. Penalty proceeding ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .It was only on the point of mens rea that the judgment in Dilip N. Shroff v. Joint CIT was upset. In Union of India v. Dharmendra Textile Processors after quoting from section 271 extensively and also considering section 271(1) (c), the Court came to the conclusion that since section 271(1) (c) 26 indicated the element of strict liability on the assessee for the concealment or for giving inaccurate particulars while filing return, there was not necessity of mens rea. . The basic reason why decision in Dilip N Shroff v. Joint CIT was overruled by this Court in Union of India v. Dharmendra Textile Processors was that according to this Court the effect and difference between section 271(1) (c) and section 276C of the Act was lost sight of in the case of Dilip N Shroff v. Joint CIT . However, it must be pointed out that in Union of India v. Dharmendra Textile processors , no fault was found with the reasoning in the decision in Dilip N. Shroff v. Joint CIT , where the court explained the meaning of the terms conceal and inaccurate. It was only the ultimate inference in Dilip N. Shroff v. Joint CIT to the effect that mens rea was an essential ingredient for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as follows, in this regard: Penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 is being initiated against the assessee in assessment year 2014-15 separately for concealment of particulars of income or furnishing inaccurate particulars of income. Thus, even in the assessment order, the specific charge for the proposed levy of penalty has not been delineated. 7. In 'CIT vs. SSA's Emerald Meadows', [2016] 73 Taxmann.com 248, the Hon'ble Apex Court looked into the facts before them that Tribunal relying on the decision of the Division Bench of the Hon'ble Karnataka High Court in the case of CIT and Another vs. Manjunath Cotton Ginning Factory [2013] 359 ITR 565 (Karn.), allowed the appeal of the assessee, holding that notice issued by the Assessing Officer under section 274 read with section 271(1)(c) of the Act was bad in law, as it did not specify under which limb of section 271(1)(c) of the Act, penalty proceedings has been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. When the matter travelled upto the High Court, it supported the judgment of the Hon'ble ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notices and we find that the relevant columns have been marked, more particularly, when the case against the assessee is that they have concealed particulars of income and furnished inaccurate particulars of income. Therefore, the contention raised by the assessee is liable to be rejected on facts. That apart, this issue can never be a question of law in the assessee s case, as it is purely a question of fact. Apart from that, the assessee had at no earlier point of time raised the plea that on account of a defect in the notice, they were put to prejudice. All violations will not result in nullifying the orders passed by statutory authorities. If the case of the assessee is that they have been put to prejudice and principles of natural justice were violated on account of not being able to submit an effective reply, it would be a different matter. This was never the plea of the assessee either before the Assessing Officer or before the first Appellate Authority or before the Tribunal or before this Court when the Tax Case Appeals were filed and it was only after 10 years, when the appeals were listed for final hearing, this issue is sought to be raised. Thus on facts, we could safel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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