TMI Blog2017 (11) TMI 1059X X X X Extracts X X X X X X X X Extracts X X X X ..... UNTANT MEMBER AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri J.P. Bairagra (AR) For The Revenue : Shri V. Justin (DR) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee under section 253 of the Income-tax Act (the Act) is directed against the different order of ld. CIT(A)-50, Mumbai dated 26.10.2016 for the Assessment Year (AY) 2009-10. The assessee has raised the following grounds of appeal: 1. The learned Commissioner of Income Tax (Appeals) erred in confirming the action of the Assessing Officer in levying penalty under section 271(1)(c) of the Income tax Act, 1961 on the addition made of unexplained investment of ₹ 33,00,000/ - under section 69 of the Act. 2. The learned Commissioner of Income Tax (Appeals) further erred in not appreciating the fact that the order passed under section 271(1)(c) of the Income tax Act, 1961 is bad in law as the notice under section 274 read with section 271 was issued in standard proforma without striking the relevant clause and without specifically stating whether the penalty was initiated for concealment of particulars of income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the notice issued under section 274 r.w.s. 271(1)(c) was invalid. The AO in the notice has not specified whether the penalty is initiated for concealment of particular of income or for furnishing inaccurate particular. The ld. AR of the assessee would submit that the copy of noticed date 08.06.2012 is placed on record at page no.40 of paper book. In the notice the AO has not strike out irrelevant portion. The notice was issued on standard printed proforma and does not spelt out under which limb of section 271(1)(c) penalty was initiated. In support of his submission, the ld. AR of the assessee relied upon the following decisions: Sr No. Particulars 1 CIT vs. M/s SSA'S Emerald Meadows. [SLP No. 11485/2016 (Arising out of decision of High Court Karnataka [ITA 380/2015) Supreme Court of India)] 2 CIT vs. M/s SSA'S Emerald Meadows. [ITA 380/2015 (High Court Karnataka.) 3 Meherjee Cassinath Holdings Private Limite Limited vs. ACIT [ITA 2555/Mum/2012] 4 CIT vs. Samson Perinchery (ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e particulars of income' referred to in Sec. 271(1)(c) of the Act denote different connotations. In fact, this distinction has been appreciated even at the level of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T. Ashok Pai, 292 ITR 11 (SC). Therefore, if the two expressions, namely 'concealment of the particulars of income' and 'furnishing of inaccurate particulars of income' have different connotations, it is imperative for the assessee to be made aware as to which of the two is being put against him for the purpose of levy of penalty u/s 271(1)(c) of the Act, so that 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 assesseecompany. 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) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eedings are initiated u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income. In our considered opinion, the attempt of the ld. CIT-DR to demonstrate application of mind by the Assessing Officer is no defence inasmuch as the Hon'ble Supreme Court has approved the factum of non-striking off of the irrelevant clause in the notice as reflective of non-application of mind by the Assessing Officer. Since the factual matrix in the present case conforms to the proposition laid down by the Hon'ble Supreme Court, we proceed to reject the arguments advanced by the ld. CIT-DR based on the observations of the Assessing Officer in the assessment order. Further, it is also noticeable that such proposition has been considered by (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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee since he did not know what exact charge he had to face. In this back ground, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified. In the instant case also, we are of the view that the AO has issued a notice, that too incorrect one, in a routine manner. Further the notice did not specify the charge for which the penalty notice was issued. Hence, in our view, the AO has failed to apply his mind at the time of issuing penalty notice to the assessee. 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. CIT-DR. 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 proc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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