2023 (9) TMI 779 - ITAT RAIPUR

Penalty u/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - valid assumption of jurisdiction by the A.O or not? - HELD THAT:- We are of a firm conviction that the very purpose of affording a reasonable opportunity of being heard to an assessee as per the mandate of Sec. 274(1) of the Act would not only be frustrated but would be rendered redundant if he is not conveyed in clear terms the specific default for which penalty under the said statutory provision was sought to be imposed. In our considered view, the indispensable requirement on the part of the A.O to put the assessee to notice as regards the specific charge contemplated under the aforesaid statutory provision, viz. ‘concealment of income’ or ‘furnishing of inaccurate particulars of income’ or both of the said defaults is not merely an idle formality but is a statutory obligation cast upon him, which we find had not been discharged in the present case as per the mandate of law.

When as per the settled position of law the two defaults, viz. ‘concealment of income’ and ‘furnishing of inaccurate particulars of income’ are separate and distinct defaults, therefore, it was incumbent on the part of the A.O to have clearly specified his said intention in the ‘Show cause’ notice which we find he had failed to do in the case before us. The aforesaid failure of the A.O cannot be merely dubbed as a technical default as the same had clearly divested the assessee of her statutory right of an opportunity of being heard and defend her case.

Ashok Sahahakari Sakhar Karkhana Ltd. [2017 (11) TMI 1048 - ITAT PUNE] had held that where in a notice issued u/s 274 of the Act the AO had used conjunction “or” to mention both limbs, i.e, concealment of income or furnishing inaccurate particulars of income and charge for levy of penalty was not explicitly clear from notice, then, the same was to be held as bad in law and penalty was liable to be set aside. Decided in favour of assessee.