TMI Blog2017 (11) TMI 1048X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs are liable to be set aside on this ground alone. Since the additional ground raised by the assessee has been allowed, the grounds raised by the assessee challenging the levy of penalty on the merits have become academic and thus, are not dealt with. Levy of penalty by the Assessing Officer in a mechanical manner without proper application of mind is fatal. Ambiguity in the notice issued under section 274 read with section 271(1)(c) would itself vitiate the entire penalty proceedings. - Decided in favour of assessee. - I. T. A. No. 876/Pun/2015 - - - Dated:- 16-8-2017 - D. Karunakara Rao (Accountant Member) And Vikas Awasthy (Judicial Member) For the Appellant : S. N. Doshi For the Respondent : Ajay Modi ORDER V ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the validity of notice issued under section 274 read with section 271(1)(c) of the Act. The additional ground raised by the assessee reads as under : On the facts and in the circumstances of the case, referring to the satisfaction recorded in the assessment order and the charge on which penalty is levied and further referring to the notice under section 274 read with section 271(1)(c) there exists vagueness, ambiguity and non-application of mind by the Assessing Officer that vitiates the validity of the penalty order. 3. Shri S. N. Doshi appearing on behalf of the assessee submitted that during the course of scrutiny assessment proceedings, the Assessing Officer made additions/disallowances on eight counts. However, the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o be levied for concealment of income and/or furnishing of inaccurate particulars of income. The learned authorised representative submitted that where specific charge for the levy of penalty is not mentioned in the notice issued under section 274 read with section 271(1)(c) and there is vagueness in the recording of satisfaction, the penalty proceedings are liable to be quashed. In support of his submissions the learned authorised representative placed reliance on the following decisions : (i) CIT v. Samson Perinchery [2017] 392 ITR 4 (Bom) ; (ii) Kanhaiyalal D. Jain v. Asst. CIT (I. T. A. Nos. 1201 to 1205/PN/2014 for the assessment years 2003-04 to 2007-08 decided on November 30, 2016 (Pune-Trib.) ; (iii) Nandkishor Tulsidas Kat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 271(1)(c) of the Act. 6. A perusal of the assessment order show that while recording satisfaction for the levy of penalty under section 271(1)(c), the Assessing Officer has held as under : In view of the facts given above, I am satisfied that the assessee has intentionally filed the inaccurate particulars of income resulting into concealment of income within the meaning of section 271(1)(c) read with section 274 of the Income-tax Act, 1961. Therefore, an amount of ₹ 3,90,51,618 has been added to the total income of the assessee society with initiation of penalty proceedings under section 271(1)(c) of the Income-tax Act for concealment of income and filing of inaccurate particulars of income, as discussed above. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 'ble Supreme Court of India in the case of T. Ashok Pai v. CIT [2007] 292 ITR 11 (SC) has held that the expression concealment of income and furnishing of inaccurate particulars of income connote different meanings and cannot be used as substitute to each other. 10. The hon'ble Karnataka High Court in the case of CIT v. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn) has held (page 600) : Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 11. The hon'ble jurisdictional High Court in the case of CIT v. Samson Perinchery (supra) has approved the principle laid down in the case of CIT v. Manjunatha Cotton and Ginning Factory (supra) and deleted the levy of penalty where there was inconsistency in recording of satisfaction and levy of penalty. 12. It is apparent from the documents on record that there is inconsistency with respect to charge for levy of penalty at all the three stages i.e., (i) recording of satisfaction ; (ii) issuance of notice ; and (iii) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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