TMI Blog2017 (9) TMI 716X X X X Extracts X X X X X X X X Extracts X X X X ..... n the basis of similar vague notice was cancelled. Thus no merit for the penalty so imposed u/s. 271(1)(c) of the IT Act. - Decided in favour of assessee. - ITA No.3254/Mum/2016 - - - Dated:- 26-7-2017 - SHRI R.C.SHARMA, AM AND SHRI SANDEEP GOSAIN, JM For The Assessee : Shri Neelkanth Khandelwal For The Revenue : Shri M.C.Omi Ningshen ORDER PER R.C.SHARMA (A.M) : This is an appeal filed by the assessee against the order of CIT(A)-45, Mumbai dated 30/12/2016 in the matter of imposition of penalty u/s.271 (1)(c) amounting to ₹ 3,28,610/-. 2. There is a delay of 34 days in filing an appeal. We had gone through the reasons given for delay in filing appeal. We had also gone through the affidavit in support of the same. We are satisfied that there were sufficient reasons for delay in filing the appeal, therefore, in the substantial interest of justice, we condone the delay and appeal is heard on merit. 3. Rival contentions have been heard and record perused. 4. Facts in brief are that assessee is an individual having income from capital gain and house property. During the course of scrutiny assessment AO found that assessee has not discl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... th the claim of loss on account of write off of fixed asset amounting to ₹ 1,82,242. Learned Authorised Representative submitted, as the non disclosure of income was due to bonafide mistake, imposition of penalty under section 271(1)(c) is improper. For such proposition, he relied upon the following decisions: i) Price Water House Coopers Pvt. Ltd. v/s CIT, 348 ITR 306; ii) DCIT v/s Kodak India Pvt. Ltd., ITA no.1533/Mum./2014 dated 05.12.2016; and iii) CIT v/s Dalmiya Diechem Industries Ltd., ITA no.1396/ Mum./2013, dated 06.07.2015. 4. The learned Authorised Representative drawing our attention to assessment order submitted, the Assessing Officer has not recorded his satisfaction whether the assessee has concealed the particulars of its income or has furnished inaccurate particulars of income. He submitted, in the notice issued under section 274 r/w 271(1)(c) also the Assessing Officer has not specified which limb of section 271(1)(c) is attracted by striking off one of them. Therefore, he submitted, the imposition of penalty is bad in law. In this context, he relied upon the decision of the Hon'ble Jurisdictional High Court in CIT v/s Samson Perinchery, ITA no.1154/20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proceeding for imposition of penalty under section 271(1)(c) either for concealing particulars of income or for furnishing inaccurate particulars of income or for both. The Assessing Officer has simply initiated the proceedings for penalty under section 271(1)(c) without mentioning the offence committed by the assessee with reference to the provisions contained under section 271(1)(c). Further, on a reference to the notice issued under section 274 r/w section 271, which is in a standard printed format, a copy of which is placed at Page 17 of the paper book, we have found that the Assessing Officer has not specified which limb of the provision contained under section 271(1)(c) is attracted to the assessee. The Hon'ble Supreme Court in Dilip N. Shroff v/s JCIT, [2007] 291 ITR 519 (SC), has observed that while issuing the notice under section 274 r/w section 271, in the standard format, the Assessing Officer should delete the inappropriate words or paragraphs, otherwise, it may indicate that the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or had furnished inaccurate particulars of income. This, acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 of the Act, which is the jurisdictional notice, for visiting an assessee with the penal provision. The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point. In the present case, neither the assessee nor anyone 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. 9. In this connection, reliance is first placed upon the judgment of the Hon'ble Karnataka High Court In the case of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n which the statutory notice was required to be issued, the Hon'ble Court concluded thus: ( p) Notice u/s 274 of the Act should be 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. 12. Finally, in concurring with the findings recorded in the order of the Tribunal, it was held thus: 66. In view of the aforesaid law, we are of the view that the Tribunal was justified in holding that the entire proceedings are vitiated as the notice issued is not in accordance with law and accordingly justified in interfering with the order passed by the appellate authority as well as the assessing authority and in setting aside the same. Hence, we answer the substantial questions of law framed in this case in favour of the assessee and against the Revenue. 13. The aforesaid judgment was unsuccessfully challenged by the revenue before the Supreme Court, as it was rejected vide Petition for Special Leave to Appeal (C) No. 13898/2014 dated 11.07.2016. Reliance was next placed upon another judgment of the Hon'ble Karnataka High Court in the case CIT v. SSA'S Em ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... risdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: 7 Therefore, the issue herein stands concluded in favour of the Respondent-Assessee by the decision of the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory (supra). Nothing has been shown to us in the present facts which would warrant our taking a view different from the Karnataka High Court in the case of Menjuneth Cotton and Ginning Factory (supra). 8. In view of the above, the question as framed do not give rise to any substantial question of law Thus, not entertained 17. The Hon'ble Supreme Court in Dilip N. Shroff v/s JCIT, [2007] 291 ITR 519 (SC), has observed that while issuing the notice under section 274 r/w section 271, in the standard format, the Assessing Officer should delete the inappropriate words or paragraphs, otherwise, it may indicate that the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or had furnished inaccurate particulars of income. This, according to the Hon'ble Supreme Court, deprives the assessee of a fair opportunity to explain its sta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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