TMI Blog2019 (3) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... are as to which of the two limbs of section 271(1)(c) he has to respond. We hold that the notice issued by the AO U/s. 274 r.w.s 271(1)(c) of the Act is on account of non-application of mind and therefore the penalty proceedings initiated are bad in law. Thus, we direct the Assessing Officer to delete the penalty levied U/s. 271(1)(c) of the Act. - Decided in favour of assessee. - ITA. No. 5267/MUM/ 2014 - - - Dated:- 20-2-2019 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER For The Assessee : Shri Pradip N. Kapasi For The Revenue : Shri Abiram Karthikeyan ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Ld. Commissioner of Income tax (Appeals) 26, Mumbai [hereinafter in short Ld.CIT(A) ] in sustaining the penalty levied U/s. 271(1)(c) of the Act. 2. At the outset, Ld. Counsel for the assessee submitted that the initiation of penalty proceedings is bad in law as the Assessing Officer has not specified the limb on which the penalty was proposed to be levied. 3. Ld. Counsel for the assessee referring to the notice issued u/s. 274 r.w.s 271(1)(c) of the Act su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngly penalty was imposed. 6. An identical situation has been considered by the Coordinate Bench in Meherjee Cassinath Holdings v. ACIT in ITA.No. 2555/MUM/2012 dated 28.04.2017 as to whether the action of the Assessing Officer in initiating penalty proceedings U/s. 271(1)(c) of the Act without striking off one of the limbs and without specifying the specific charge in the notice initiating penalty proceedings for inaccurate particulars of income in the Assessment Order and the Coordinate Bench considering the decision of the Hon ble Jurisdictional High Court in the case of CIT v. Samson Perinchery [392 ITR 4] and also various decisions held that action of the Assessing Officer in non-striking off relevant clause in the notice shows that the charge being made against the assessee is not firm therefore proceedings suffer from non-compliance with principles of natural justice in as much as the Assessing Officer himself is not sure of the charge and the assessee is not made aware as to which of the two limbs of section 271(1)(c) of the Act he has to respond. 7. Following the above decision, similar view has been taken by the Coordinate Bench in the case of Orbit Enterprises v. IT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no one aspect would be decisive. In this context, useful reference may be made to the following observation in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) (head note): Under section 274 of the Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings. In M/s Maharaj Garage Co. (supra), the Hon ble Bombay High Court at para 15 held: The requirement of section 274 of the Income Tax Act for granting reasonable opportunity of being heard in the matter cannot be stretched to the extent of framing a specific charge of asking the assessee an explanation in respect of the quantum of penalty proposed to be imposed, as has been urged. The assessee was supplied with the findings recorded in the order of re-assessment, which was passed on the same date on which the notice u/s 271(1)(c) was issued, initiating the proceedings of imposing the penalty. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee has concealed the true facts thereby filed inaccurate particulars. Therefore, we do not find any error or infirmity in the findings of the Ld. CIT(A). The penalty u/s. 271(1)(c) is leviable on the facts of the case. The reliance on the decision of the Tribunal is clearly distinguishable on the facts. We, accordingly confirm the levy of penalty u/s. 271(1)(c) of the Act. In Ms. Laudres Austin (supra), the Tribunal held the following : In the instant case also we hold that penalty proceedings were initiated properly as there is no defect in the recording of satisfaction by the AO as well there is no defect in the notice issued u/s 271 r.w.s. 274 of the 1961 Act. The decision of Hon ble Bombay High Court in Samson Perincherry (supra) is concerning the issuance of penalty proceedings under one limb while levying of penalty under another limb of section 271(1)(c) which is no permissible as per ratio of this decision. The Hon ble Supreme Court in SSA s Emerald Meadows (supra) while dismissing SLP recorded finding that the Hon ble Lordships did not find any merit in this petition which means ratio of decision of Hon ble Karnataka High Court in SSA s Emerald Meadows i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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