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2020 (11) TMI 414 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance of FBT as made in its hands while framing the assessment - HELD THAT:- Admittedly, the A.O is vested with the powers to levy penalty u/s 271(1)(c) if, in the course of the proceedings he is satisfied that the assessee had either “concealed his income” or “furnished inaccurate particulars of his income”. As penalty proceedings are in the nature of quasi criminal proceedings, therefore, the assessee as a matter of a statutory right is supposed to know the exact charge for which he is being called upon to explain that as to why the same may not be imposed on it. The non-specifying of the charge in the ‘SCN’ notice not only reflects the non-application of mind by the A.O, but, in fact, defeats the very purpose of giving a reasonable opportunity of being heard to the assessee as envisaged under Sec. 274(1) - fine distinction between the said two defaults contemplated in Sec. 271(1)(c) viz. “concealment of income” and “furnishing of inaccurate particulars of income” had been appreciated at length in the case of Dilip & Shroff [2007 (5) TMI 198 - SUPREME COURT] and T. Ashok Pai [2007 (5) TMI 199 - SUPREME COURT]. As the two defaults viz. “concealment of income” and “furnishing of inaccurate particulars of income” as contemplated in Sec.271(1)(c) are separate and distinct defaults which operate in their exclusive and independent fields, we, therefore, are unable to subscribe to the view taken by the CIT(A) that the A.O had validly imposed penalty for “furnishing of inaccurate particulars which led to concealment of income by the assessee” in respect of the aforesaid solitary addition/disallowance made in the hands of the assessee. A.O in his ‘SCN’ had failed to put the assessee to notice as regards the default for which it was called upon to explain as to why penalty u/s 271(1)(c) may not be imposed on it, in our considered view, would suffice to divest the A.O from valid assumption of jurisdiction for imposing penalty under the said statutory provision. As the two defaults viz. “concealment of income” and “furnishing of inaccurate particulars of income” as contemplated in Sec.271(1)(c) are separate and distinct defaults which operate in their exclusive and independent fields, we, therefore, are unable to subscribe to the view taken by the CIT(A) that the A.O had validly imposed penalty for “furnishing of inaccurate particulars which led to concealment of income by the assessee” in respect of the solitary addition/disallowance made in the hands of the assessee. We thus in the backdrop of our aforesaid observations not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set aside the order of the CIT(A) who had upheld the same. The penalty u/s 271(1)(c) is quashed in terms of our aforesaid observations. - Decided in favour of assessee.
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