TMI Blog2017 (10) TMI 44X X X X Extracts X X X X X X X X Extracts X X X X ..... rd format, without striking out irrelevant clause therein. The said notice referred to both limbs of section 271(1)(c) of the Act. Thus, there was no clarity in mind of AO as to which charge is being proposed/initiated against the assessee. This infirmity in the notice was sought to be demonstrated as reflection of non-application of mind by ld. AR of the assessee - Decided in favour of assessee. - ITA No. 1999/Mum/2014 And ITA No. 2000/Mum/2014 - - - Dated:- 31-5-2017 - SHRI P.K. BANSAL, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Yogesh A. Thar with Ms Ayushi Modani (AR) For The Revenue : Shri Suman Kumar (DR) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. These two appeals by assessee under section 253 of the Income-tax Act (the Act) are directed against two different orders of ld. Commissioner of Income Tax-5, Mumbai [the CIT], Mumbai dated 27.12.2013 for Assessment Year (AY) 2005-06 2007-08. The ld Commissioner of Income Tax (Appeals) confirmed the order of penalty levied under section 271(1)(c) of the Act for both the assessment years. In both the appeals the assessee has ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of second preposition, the ld. AR of the assessee argued that the Security Expenses are deductable expenses in computing Annual Letting Value (ALV) while computing the income under the head Income from House Property and relied on the decision of co-ordinate bench of Delhi Tribunal in Lek Raj Channa vs. ITO (37 TTJ 297) (Del Tribunal.). The brokerage payment is also deductible in computing the ALV while computing the income under the head Income from House Property and the same has been held in case of Govind S. Singhania Vs. ITO (ITA No. 4581/M/2006 (Mum Trib.). The ld. AR of the assessee argued that the Society Charges and Maintenance Expenses which are general in nature and has been held as deductible in computing the ALV while computing the income under the head Income from House Property in various decisions of tribunal. In support of his submission the ld AR for the assessee relied on the following decisions; (i) Aloo Bejan Daver Vs. ITO (ITA Nos. 2381 2382/Mum/2010 (Mum.-Trib.). (ii) CIT Vs. R.J. Wook (P.) Ltd. (20 taxmann.com 599) (Del.-HC). (iii) Realty Finance Leasing (P.) Ltd. Vs. ITO (5 SOT 348) (Mum.-Trib.) (iv) Bombay Oil Industries Ltd. Vs. DCIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue further argued that unless the assessee raised specific ground of appeal, the assessee cannot be allowed to argue on such issue which was even not raised before the first appellate authorities. 4. We have considered the rival submissions of the parties and have gone through the orders of authorities below. Section 271(1)(c) of the Act provides that the AO is entitled to levy penalty in case during the assessment proceeding, the AO is satisfied that the assessee has concealed the particulars of income or furnished inaccurate particulars of income. The concealment of particulars of income and filing inaccurate particulars referred in section 271(1)(c) of the Act denote different connotations. This distinction was discussed by Hon ble Apex Court in case of Dilip N. Shroff (161 Taxman 218(SC) and in case and in case of T. Ashok Pai (292 ITR 11(SC). Wherein the Hon ble Apex Court held that, if two expression i.e. concealment of particular of income and furnishing of inaccurate particulars of income have to different connotations, it is imperative for the assessee, that assessee be made aware of as to which of one action is being initiated against him for levy of penalty u/s. 271(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee can defend accordingly. It is in this background that one has to appreciate the preliminary plea of assessee, which is based on the manner in which the notice u/s 274 r.w.s. 271(1)(c) of the Act dated 10.12.2010 has been issued to the assessee- company. A copy of the said notice has been placed on record and the learned representative canvassed that the same has been issued by the Assessing Officer in a standard proforma, without striking out the irrelevant clause. In other words, the notice refers to both the limbs of Sec. 271(1)(c) of the Act, namely concealment of the particulars of income as well as furnishing of inaccurate particulars of income. Quite clearly, non-striking-off of the irrelevant limb in the said notice does not convey to the assessee as to which of the two charges it has to respond. The aforesaid infirmity in the notice has been sought to be demonstrated as a reflection of non-application of mind by the Assessing Officer, and in support, reference has been made to the following specific discussion in the order of Hon'ble Supreme Court in the case of Dilip N. Shroff (supra):- 83. It is of some significance that in the standard proforma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer in the assessment order. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court also in the case of Shri Samson Perinchery, ITA Nos. 1154, 953, 1097 1126 of 2014 dated 5.1.2017 (supra) and the decision of the Tribunal holding levy of penalty in such circumstances being bad, has been approved. 11. Apart from the aforesaid, the ld. CIT-DR made an argument based on the decision of the Hon'ble Bombay High Court in the case of Smt. Kaushalya Others, 216 ITR 660 (Bom.) to canvass support for his plea that non-striking off of the irrelevant portion of notice would not invalidate the imposition of penalty u/s 271(1)(c) of the Act. We have carefully considered the said argument set-up by the ld. CIT-DR and find that a similar issue had come up before our coordinate Bench in the case of Dr. Sarita Milind Davare (supra). Our coordinate Bench, after considering the judgment of the Hon'ble Bombay High Court in the case of Smt. Kaushalya Ors., (supra) as also the judgments of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) and Dharmendra Textile Processors, 306 ITR 277 (SC) deduced as under :- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12. The aforesaid discussion clearly brings out as to the reasons why the parity of reasoning laid down by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) is to prevail. Following the decision of our coordinate Bench in the case of Dr. Sarita Milind Davare (supra), we hereby reject the aforesaid argument of the ld. CITDR. 13. Apart from the aforesaid discussion, we may also refer to the one more seminal feature of this case which would demonstrate the importance of non-striking off of irrelevant clause in the notice by the Assessing Officer. As noted earlier, in the assessment order dated 10.12.2010 the Assessing Officer records that the penalty proceedings u/s 271(1)(c) of the Act are to be initiated for furnishing of inaccurate particulars of income. However, in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act of even date, both the limbs of Sec. 271(1)(c) of the Act are reproduced in the proforma notice and the irrelevant clause has not been struck-off. Quite clearly, the observation of the Assessing Officer in the assessment order and non-striking off of the irrelevant clause in the notice clearly brings out the diffidence on the part of Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X
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