TMI Blog2017 (9) TMI 1396X X X X Extracts X X X X X X X X Extracts X X X X ..... essee was being penalized which he has failed to do so and the same has resulted into taking away assessee’s valuable right of contesting the same and thereby violates the principles of natural justice. We are of the considered opinion that the penalty proceedings stood vitiated for want of satisfaction and in violation of principle of natural justice and therefore, liable to be quashed. We held so which results into dismissal of revenue’s appeal. - I.T.A. No.6345/Mum/2014 - - - Dated:- 27-6-2017 - SHRI JOGINDER SINGH, JM AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : Ajay Singh, Ld. AR For The Revenue : Rajesh Kumar Yadav, Ld. DR ORDER Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by Revenue for Assessment Year [AY] 2008- 09 assails the order of Ld. Commissioner of Income Tax (Appeals)-II [CIT(A)], Mumbai dated 31/07/2014 qua deletion of penalty u/s 271(1)(C) of the Income Tax Act, 1961. 2. Briefly stated, the assessee being resident firm engaged as builders and developers , was subjected to an assessment u/s 143(3) read with Section 153B(b) for the impugned AY on 30/12/2009. The assessment under question w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pecific concealment or suppression of the receipts. In fact, the A.O has also not issued any show cause notice quantifying additional income of ₹ 2,20,00,000/-. Under these circumstances, it is very clear that the appellant itself has come forward voluntarily to disclose an additional income of ₹ 2,20,00,000/- to buy mental peace and to avoid litigation with further condition that no penalty should be levied. It is also noticed that the appellant has very clearly explained the variation in the rate on account of customers negotiations and specifications of the flats including various amenities and location of the flat. It is an established commercial practice that the flats or any other property at the prime location are sold at higher prices and the additional facilities provided are also charged separately. it may also be noted that appellant Itself has disclosed a sum of ₹ 4,15,05,000/- on account of on-money received at a flat rate of ₹ 150/- per sq. ft. Although the A.O. accepted this disclosure, yet Imposed penalty u/s. 271AAA in this assessment year Itself by observing that the manner In which such income was earned was not explained because on mon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f mind as per the ratio laid down by Apex court in Mak Data Pvt. Ltd. Vs. CIT [2013 358 ITR 593]. 7. Per contra, the Ld. counsel for assessee [AR] filed an application under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 in respect of legal contentions regarding validity of notice issued u/s 271(1)(c) since Ld. CIT(A) dismiss the same in the appellate order. By way of said ground, the Ld. AR has questioned the validity of the penalty proceedings on account of non-recording of proper satisfaction by the Ld. AO. Our attention has been drawn to the grounds/limbs on which penalty was initiated, show cause notice u/s 274 read with section 271(1)(c) and the grounds on which the penalty has finally been levied. Reliance has been placed on many judicial pronouncements of various higher authorities for the contention that mere defect in the show-cause notice vitiates the penalty proceedings itself. 8. We have heard the rival contention and perused relevant material on record. Admittedly, the penalty has been levied on voluntary surrender made by the assessee during assessment proceedings without there being any cogent material on record. However, since the issue r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... furnished inaccurate particulars of income. Finally, the penalty has been levied for concealment u/s 271(1)(c) which shows confusion / doubt prevailing in the mind of Ld. AO. Undisputedly, the AO was required to specify the exact charge for which the assessee was being penalized which he has failed to do so and the same has resulted into taking away assessee s valuable right of contesting the same and thereby violates the principles of natural justice. 11. Our view is fortified by the judgment of Hon ble Supreme Court rendered in Dilip N.Shroff Vs. JCIT (291 ITR 519) wherein the Supreme Court observed that the concealment of income and furnishing of inaccurate particulars of income are different. The Hon ble Court further held that non-striking off of the relevant portions of standard show-cause notice reflects non-application of mind by AO and hence vitiates the penalty. It is further noted that the ratio of this case was very much relevant and valid despite the judgment of Apex Court in the case of CIT Vs. Dharmendra Textile Processor ( 306 ITR 277) in view of another judgment of Supreme Court in CIT Vs. Reliance Petro products Pvt. Ltd. [322 ITR 158] wherein it was ob ..... X X X X Extracts X X X X X X X X Extracts X X X X
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