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2018 (10) TMI 132

Penalty U/s 271(1)(c) - non specification of charge - defective notice - inappropriate words in the notice issued u/s 274 r.w.s. 271 have not been struck off - Held that:- A perusal of the notice issued u/s 274 r.w.s. 271 dated 31.03.2004 shows that the inappropriate words in the said notice have not been struck off and it is a printed notice. Even the last line of the said notice only speaks of section 271 and does not even mention of section 271(1)(c) of the I.T. Act. - We find an identical issue had come up before this Bench of the Tribunal in the case of Sahiwal Investment & Trading co. vs. ITO [2018 (7) TMI 1472 - ITAT DELHI] holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) to be bad .....

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and penalty of ₹ 3,79,637/- levied by Ld. AO deserves to be deleted. 4. That appellant craves right to amend, add, delete or withdraw any of the ground of appeal either before or at the time of hearing of this appeal. 3. Facts of the case, in brief, are that the assessee is an individual and derives income from salary, house rent and income from other sources. He filed his return of income on 30.07.2009 declaring total income of ₹ 40,25,560/-. In this case, a search and seizure operation u/s 132 of the I.T. Act, 1961 was carried out on 20.01.2012. In response to notice u/s 153A, the assessee filed his return of income on 10.10.2013 declaring total income of ₹ 43,95,120/-. In the computation of income filed along with retu .....

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Officer levied penalty of ₹ 4,30,622/- u/s 271(1)(c) being the minimum penalty at the rate of 100% of the tax sought to be evaded. 6. In the appeal, the ld. CIT(A) confirmed the penalty so levied by the Assessing Officer. 7. Aggrieved with such order of the ld. CIT(A), the assessee is in appeal before the Tribunal. 8. The ld. counsel for the assessee, at the outset, referred to the notice issue u/s 274 r.w.s. 271 dated 31.03.2017 and submitted that the inappropriate words in the said notice have not been struck off. Therefore, it is not understood as to under which limb of provisions of section 271(1)(c) the Assessing Officer has levied penalty since the said show-cause notice issued u/s 274 did not specify the charge against the ass .....

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trongly supported the order of the ld. CIT(A). Referring to the decision of the Hon ble Madras High Court in the case of Sundaram Finance Ltd. vs. CIT reported in 403 ITR 407, he submitted that the Hon'ble High Court in the said decision has held that where notice did not show nature of default, it was a question of fact. The assessee had understood the purport and import of notice and hence no prejudice was caused to the assessee. The Hon'ble High Court while referring to this decision has considered the decision of the Hon ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factory reported in 359 ITR 565. 12. Referring to the decision of the Hon ble Bombay High Court in the case of CIT vs. Smt. Kaushal .....

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de by both the sides and perused the material available on record. We have also considered the various decisions cited before us. We find the only issue to be decided in the grounds of appeal is regarding the sustainable of penalty levied u/s 271(1)(c) when the inappropriate words in the notice issued u/s 274 r.w.s. 271 have not been struck off. A perusal of the notice issued u/s 274 r.w.s. 271 dated 31.03.2004 shows that the inappropriate words in the said notice have not been struck off and it is a printed notice. Even the last line of the said notice only speaks of section 271 and does not even mention of section 271(1)(c) of the I.T. Act. We find an identical issue had come up before this Bench of the Tribunal in the case of Sahiwal Inv .....

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ether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the ITA No. 4913/Del/2015 decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." Thus, Additional Ground No. (ii) of the assessee's appeal is allowed. Since the inception of the notice issued u/s 271(1)(c) has become null and vo .....

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