TMI Blog2018 (10) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER AMARJIT SINGH, JM: The assessee has filed the present appeal against the order dated 28.09.2015 passed by the Commissioner of Income Tax (Appeals)-53, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y. 2011-12 wherein the penalty levied by the AO has been upheld. 2. The assessee has raised the following grounds: - 1 The Learned Commissioner of Income Tax (Appeals)-53, Mumbai CIT(A) ], on the facts of the case and in law, erred in upholding the order of the Deputy Commissioner, Central Circle-33 (Assessing Officer) TAG ) dated 11.02.2013, confirming levy of penalty of ₹ 20,88,028/- under section 271 (c) Income Tax Act, 1961, an alleged concealment of long term capital gain of Rs,1,01,36,060/-. C1T(A) ought to have considered that omission to offer income from capital gain inadvertent and the receipts were fully accounted for and disclosed in the audited balance sheet and sale deed was duly registered and was in public domain. 2. The Appellant craves leave to add to/or amend and/or modify and/or alter and/or delete the aforesaid grounds of appeal. Additional Grounds Ground 3: That the notice issued under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e issues the assessee has challenged the deletion of penalty on account of defective notice u/s 271(1)(c) of the Act/274 of the Act. It is argued that the Assessing Officer nowhere tick off any limb to levy the penalty in the notice. However, the penalty was levied on account of concealment of income which is wrong against law and facts, therefore, on account of defective notice no penalty is leviable in view of the law settled in CIT Vs. SSA S Emerald Meadows Meadows (2016) 73 taxmann.com, CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bombay), Samson Perinchery Vs. ACIT ITA. 4624-4630/M/2013 Maherjee Cassinath Holdings Pvt. Ltd. Vs. ACIT ITA. No. 1596/M/2014. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order passed by the authority below, we noticed that the assessee alienated its immovable property located t Mumbai on 31.08.2010 and the assessee failed to disclose the long term capital gain to the tune of ₹ 1,01,36,060/-, therefore, the Assessing Officer the penalty was levied in pursuance of the order dated 29.10.2014. The assessee took the legal ground on account of defective notice u/s 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions, 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 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 demonst ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce 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 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 c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with law. In support of his contention, the Ld. Representative of the assessee has placed reliance upon the law settled in Price Water House Coopers Pvt. Ltd. Vs. CIT 348 ITR 306 (SC). The copy of order for the A.Y. 2012-13 of the assessee dated 29.07.2016 is on the file in which the matter of controversy has been discussed in para no. 6 which is hereby reproduced below.: - 6.1 During the course of assessment proceedings, it was noticed from perusal of AIR information that the appellant had sold the immovable property located at Industrial Estate, V,S, Marg, Mumbai. The appellant was asked to reconcile the .MR information with the return tiled. In response, the appellant submitted that it had not included the capital gam on sale of said immovable property in its return of income and by mistake, the capital gam corresponding to sale of another property had been declared in the return. The appellant submitted details of property and copies of agreement of purchase and sales of said property. On scrutiny of the said agreements, the A.O, worked out LTCG of ₹ 59.52,742/- on sale of aforesaid property which was added to the total income of the appellant p 6.2 In the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 6.3.2 Further, it is found that though the appellant had sold 1800 sq.ft. area of aforesaid property vide Sale Deed dated 11.11.2011 for a consideration of Rs,2.25 crores, it had nor disclosed the LTCG on sale of the said property m (he return of income for the A.Y. under consideration. At the time of assessment, the appellant was asked to reconcile the AIR information in regard to sale of the aforesaid property with the return of income. It was only then that the appellant admitted that it had not included the capital gam of Rs.l,71,429/- (Rs.2,25,00,000 -Rs.84.28,57l) on sale aforesaid property in its P L Account/return of income filed on 29.09.20L3, In these circumstances, no fault can be found with the action of the A.O. in computing the LTCG on sate Of aforesaid property at R5.59,52,42/-and adding the same to the total income of the appellant. The action of the A,0. in making addition of ₹ 59,52,742/- on account of undisclosed LTCG on sale of property is, therefore, upheld. From perusal of the computation of total income as per the assessment order, it is noticed that the A.O. had taken total income as per computation filed by the appellant at a loss of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X
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