TMI Blog2019 (3) TMI 599X X X X Extracts X X X X X X X X Extracts X X X X ..... tent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point. In the present case, neither the assessee nor anyone else could make out as to whether the notice u/s. 274 r.w.S. 271 of the Act was issued for concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with the case of the Assessing Officer. There are a catena of judgments highlighting the necessity for identifying the charge for which the assessee is being visited and in all those decisions, Hon'ble Courts have repeatedly held that where the jurisdictional notice is vague, similar to the one in the present case, the consequent levy cannot be sustained. As decided in SHEVETA CONSTRUCTION CO. PVT. LTD., THROUGH ITS MANAGING DIRECTOR DINESH KR. CHOUDHARY VERSUS ITO, WARD 3 (4) , JAIPUR [2016 (12) TMI 1603 - RAJASTHAN HIGH COURT] A.O. has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on behalf of the assessee and submitted that the penalty is bad in law-as notice issued u/s 271 (1) (c) of the Act is improper and invalid. Our attention was drawn to the assessment order wherein the A.O. held in para 8.3 of the order that penalty proceedings u/s 271 (1) (c) of the Act is initiated for furnishing the inaccurate particulars of income / for concealment of income and at the foot of assessment order issue penalty notice u/s 271 (1) (c) of the Act for concealment of income / for furnishing of inaccurate particulars of income. In the assessment order thus there is no satisfaction that whether the penalty is initiated for concealment of income or furnishing of inaccurate particulars of income. 5. Our attention was also invited to the notice issued U/s 274 read with Section 271 of the Act wherein it was stated that the penalty is imposable as the assessee had concealed particulars of income or furnished inaccurate particulars of income. 6. In view of the above, it was submitted that the notice issued under section 274, read with Section 271(1)(c) of the Act should specify under which limb of Section 271 (1) (c) of the Act, the penalty proceedings had been initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iled SLP in Hon'ble Supreme Court which has been dismissed. Therefore, Hon'ble Supreme Court has approved the findings made by Hon'ble Karnataka High Court in the case of CIT Vs. SSA s Emerald Meadows And CIT Vs Manjunatha Cotton Ginning Factory others [2013] 359 ITR 565. 7. Further reliance was placed on the decision of the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory [2013] 359 ITR 565 (Karnataka) after referring to the decision of Hon'ble Supreme Court in the case of T. Ashok Pai (Supra) held as under: - . Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 taxman 156, has held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur Bench in the case of Narayana Heights Towers, Vs. I.T.O. Ward 2- 4 Jaipur ITA No. 1033/JP/2016 has canceled the penalty by holding that: - 3.2 We have heard the rival contention, perused the material available on record and gone through the orders of the authorities below. For the sake of clarity the relevant contents of the Assessment order are reproduced as under: - Penalty u/s 271 (1) (c) is separately as assessee has concealed the income. Relevant contents of the Penalty Order are reproduced as under: - As the assessee had not filed any appeal against order of the A.O. and it appears that the assessee is satisfied with the order passed by the A.O.. Therefore, it appears that the assessee has nothing to say and has no objection regarding imposing the penalty us/ 271 (1) (c) of I. T. Act, 1961. Therefore, I impose a penalty of equal to 100% of tax sought to be evaded on account of the above acts of the assessee of ₹ 34,05,436/- i.e. 100% tax evaded. In the light of the above, we need to examine whether assessment order and the penalty order comply with the provisions of section 271 (1) (c) of the Act. We find that on page 3 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment order. Therefore, it appears that the assessee has nothing to say and has no objection regarding the imposing of the penalty under section 271 (1) (c) of the Act. In our considered view, the assessing officer was not justified in imposing the penalty on this basis the action of the assessing officer is contrary to the provision of law. 11. The ld AR of the assessee also placed reliance on the decision of Jaipur Bench of the ITAT in the case of Lal Chand Mittal Vs. DCIT (ITA No. 772/JP/2016 order dated 29-12-2011 and various other cases decided by it held that on the basis of such notice issued by sending printed where only all the ground of section 271 (1) (c) are mentioned or where show cause notice u/s 271 (1) (c) for imposing of penalty without specifying the limb for reasons to impose penalty whether for concealment of income or furnish inaccurate particulars of income is not as per law and assessing officer did not have any jurisdiction to impose penalty u/s 271 (1) (c). In the case(s) Radha Mohan Maheshwari Vs. DCIT (ITA No. 773/JP/2013) Mohd. Sharif Khan Vs. DCIT (ITA No. 441/JP/2014) Shankar Lal Khandelwal Vs. DCIT (ITA No. 878/JP/2013) Murari Lal Mittal (ITA No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred by the lower authorities in their respective orders as well as cited by the ld. AR and ld. DR during the course of hearing before us in the context of factual matrix of the case. We had also perused the notice issued U/s 274 read with Section 271 of the Act dated 23/3/2016 as placed on the record. It is clear from the notice so issued that the Assessing Officer had levied charge of concealed the particulars of income or furnished inaccurate particulars of such income. In view of the judicial pronouncements discussed hereinbelow, the notice issued under section 274, read with Section 271 (1) (c) of the Income Tax Act, 1961, should specify under which limb of Section 271 (1) (c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. In the absence of which no penalty should be levied on the assessee as determination of such limb is sine qua non for imposition of penalty under section 271 (1) (c) of the Act. 16. There can be no doubt that penalty u/s. 271(1)(c) of the Act is levied for concealing particulars of income or for furnishing inaccurate particulars of such Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oncealment furnishing inaccurate particulars of income are different Thus, the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The apex court in the case of Ashok Pai reported in [2007] 292 ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of Manu Engineering Works reported in [1980] 122 ITR 306 (GUJ) and the Delhi High Court in the case of CIT v. Virgo Marketing P Ltd reported in [2008 171 Taxman 156 has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment then the notice has to be appropriately marked Similar is the case for furnishing inaccurate particulars of income. (p) Notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c) i.e. whether it is for concealment of income or for furnishing of incorrect particula ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been initiated le. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunel while allowing the appeal of the assessee, has relied on the 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. 23. The SLP filed by the department in the aforesaid case also was dismissed by the Hon'ble Supreme Court vide Petition for Special Leave to Appeal (C) No .... ./2016 (CC No. 11485/2016) dated 05.08.2016. 24. The Hon ble Bombay High Court in the case of CIT v. Shri Samson Perinchery [Income Tax Appeal No. 1154 of 2014 and others dated 05.01.2017] had also occasion to consider a similar issue. In this case, though proceedings u/s. 271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income, in the notice issued u/s. 274 r.w.s. 271 of the Act in the standard form, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order imposing penalty has to be made only on the ground on which the penalty proceedings has been initiated. 26. The Hon ble Jurisdictional High Court in the case of Shevata Construction Co. Pvt. Ltd. (supra) has in para 9 as under: Taking into consideration the decision of the Andhra Pradesh High Court which virtually considered the subsequent law and the law which was prevailing on the date the decision was rendered on 27.08.2012. In view of the observation made in the said judgement, we are of the opinion that the contention raised by the appellant is required to be accepted and in the finding of Assessing officer in the assessment order it is held that the A.O. has to give a notice as to whether he proposes to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order . 27. Applying the proposition of law laid down by the various Hon'ble High Courts including the Hon ble Jurisdictional High Court, we do not find any merit for the penalty so imposed, accordingly, AO is directed to delete the penalty so imposed u/s. 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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