TMI Blog2019 (6) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... off. This indicates non application of mind on the part of the AO while issuing the penalty notices. Thus, in the circumstances and facts of the case, the penalty proceedings initiated by the AO are bad in law - Decided in favour of assessee. - ITA No.110/Del/2019, ITA No.6739/Del/2018 - - - Dated:- 31-5-2019 - Shri G.D. Agrawal, Vice President And Shri Sudhanshu Srivastava, Judicial Member For the Assessee : Shri Ajay Wadhwa Adv., Ms Ayushi Gupta, CA For the Department : Ms Rinku Singh, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JM : Both these appeals are preferred by the assessee. ITA 6739/Del/2018 is filed against the order dated 16.11.2015 passed by the Ld. Commissioner of Income Tax (Appeals)-32, New Delhi for assessment year 2010-11 and challenges the dismissal of the assessee s appeal in the quantum proceedings. ITA No. 110/Del/2019 is preferred against the order dated 8.10.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-12, New Delhi {CIT (A)} for assessment year 2010-11 and challenges the confirmation of penalty of ₹ 15,50,000/- imposed u/s 271(1)(c) of the Income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reduced to ₹ 15,16,800/- against which the assessee is now in appeal before this Tribunal (ITAT) in ITA 110/Del/2019 and has raised the following grounds of appeal:- 1. That on the facts and circumstances of the case and in law, the order dated 08.10.2018 passed by the Ld. Commissioner of income tax- appeals ( CIT (A) ) is erroneous and bad in law. 2. The Ld. CIT (A) has erred on facts and in law in confirming the order of the Ld. Assessing Officer ( AO ) imposing penalty u/s 271(1)(c) without any basis and without appreciating the fact that the Assessee does not fall under the purview of section 271(1)(c) as there is no concealment or furnishing of inaccurate particulars of income. 3. The Ld. CIT (A) has erred on facts and in law in confirming the order of the Ld. Assessing Officer ( AO ) imposing penalty u/s 271 (1)(c) on addition on account of valuation of closing stock on the basis of lower of cost or net realizable value, since the purchases were made by the Assessee from its sister concern. 4. The Ld. CIT(A) has erred on facts and in law in confirming the order of the Ld. Assessing Officer ( AO ) imposi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive (AR) submitted that under instructions from his client, the quantum appeal bearing caption no. 6739/Del/2018 was not being pressed. 4.0 In view of the submission of the Ld. AR that the quantum appeal was not being pressed, the same is dismissed as not pressed. 5.0 With respect to the penalty, the Ld. AR submitted that the assumption of jurisdiction by the Assessing Officer for initiating penalty proceedings was bad in law since no specific charge had been mentioned in the show cause notices issued vide notices dated 30.3.2013 and 22.03.2017 issued u/s 274 r/w 271(1)(c) of the Act. He drew our attention to pages 64 and 68 of the Paper Book filed by the assessee and pointed out that the irrelevant portions had not been crossed out in both the notices and, therefore, it was amply clear that the Assessing Officer had not specified the charge as to whether the penalty proceedings were for concealment of income or for furnishing inaccurate particulars of income. The Ld. AR submitted that in the first notice dated 30.03.2013, irrelevant clauses had not been struck off and further even the assessment year for which the penalty proceedings were being initi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lower authorities. 7.0 We have heard the rival contentions and have also perused the material on record. It is evident from the both the notices u/s 274 r.w.s. 271 of the Act for the impugned year that the Assessing Officer has not specifically mentioned as to under which limb of Section 271(l)(c) of the Act the penalty proceedings had been initiated by him, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Hon ble High Court of Karnataka in the case of CIT vs. Manjunatha Cotton Ginning Factor, reported in 359 ITR 565 (Kar) has, under identical facts, held as under - (p) Notice under section 274 of the Act should specif ically state the grounds mentioned in Section 271(l)(c), i.e., whether it is for concealment of income or for furnishing of inaccurate particulars of income. (q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. 7.1 The said above-said judgment of the Hon ble High Court of Karnataka in the case of CIT vs. Manjunatha Cotton Ginning Factor (supra) has been followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is Court. The appeal is accordingly dismissed. 7.2 Further, the SLP filed by the Revenue against the judgment of the Karnataka High Court in the case of Commissioner of Income Tax vs. SSA s Emerald Meadows (supra) was dismissed by the Hon ble Supreme Court of India. Therefore, respectfully following the judgment of the Hon ble Karnataka High Court as above-mentioned we are of the considered view that the Assessing Officer is required to specify 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 for furnishing of inaccurate particulars of income. From the perusal of the notices, it is clear that the Assessing Officer has not specified as to under which limb of the section the penalty was imposable. The notices, in fact, are in the standard pro forma wherein the irrelevant clauses have not been struck off. This indicates non application of mind on the part of the Assessing Officer while issuing the penalty notices. Thus, in the circumstances and facts of the case, the penalty proceedings initiated by the Assessing Officer are bad in law and deserve to be deleted. Accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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