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2019 (6) TMI 670

..... ISETTY REVATHI [2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT] the notice issued u/s 271(1)(c) is to be held as invalid. Accordingly, we quash the notice issued u/s 271(1)(c) and cancel the orders of the lower authorities and allow the appeal of the assessee. Since we have quashed the notice and cancelled the consequent orders of lower authorities, we consider it is not necessary to adjudicate the other grounds raised by the assessee. - I.T.A.No.20/VIZ/2019 - 12-6-2019 - Shri V. Durga Rao, Judicial Member And Shri D.S. Sunder Singh, Accountant Member For the Appellant : Shri T.V.U.B.S.Kishore Babu, AR For the Respondent : Smt.Suman Malik, DR ORDER PER SHRI D.S.SUNDER SINGH, ACCOUNTANT MEMBER : This appeal is filed by the assessee against the .....

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..... e are purely legal grounds which do not require any specific investigation. Hence, the additional grounds raised by the assessee are admitted. 5. We first take up the additional ground No.1 which is a pure legal issue. The assessee filed the return of income declaring total income of ₹ 10,27,147/- and the assessment was completed u/s 143(3) on total income of ₹ 38,63,030/-. Subsequently, the AO levied penalty of ₹ 18,00,000/- for concealment of income vide order dated 29.03.2010. During the appeal hearing, the Ld.AR raised the additional grounds stating that the notice issued u/s 271(1)(c) r.w.s. 274 is ambiguous and defective. The AO did not specify in the notice for which act of offence, the penalty was proposed to be le .....

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..... ssued u/s 271(1)(c) invalid and consequent orders passed imposing the penalty is unsustainable. This view is upheld by this Tribunal in the case of Shri Meka Kasi Visweswarudu, vide I.T.A. No.383/Viz/2018 dated 16.11.2018 following the decision of Hon ble jurisdictional High Court in the case of Baisetty Revathi [2017] 398 ITR 88 (Andhra Pradesh and Telangana). For the sake of clarity and convenience, we extract the relevant part of the order of Hon ble High Court which reads as under : 10. A copy of the proforma notice under section 271 read with section 274 of the Act of 1961 addressed to the assessee on March 22, 2013 is produced. Perusal thereof reflects that the irrelevant contents therein, which had no application to the assessee, wer .....

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..... ull opportunity to meet the case of the Revenue so as to show that the conditions stipulated in section 271(1)(c) do not exist and that he is not liable to pay the penalty. It was further held that the practice of the Revenue in sending a printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law when the consequence of the assessee not rebutting the initial presumption is serious in nature and he has to pay a penalty ranging from 100 per cent. to 300 per cent of the tax liability. As the provisions of section 271(1)(c) have to be strictly construed, the Bench mandated that the notice issued should set out the grounds which the assessee has to meet specifically, otherwise the principle .....

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..... amount added or disallowed while computing the total income of such person for the purposes of the penalty provision shall be deemed to represent the income in respect of which particulars had been concealed. The Supreme Court observed that the statutory provision included the "Explanation" and once the assessee was put on notice, no express invocation of the "Explanation" is necessary. 14. This judgment has no application to the case on hand as what we are concerned with presently is whether the assessee is required to be put on notice as to whether she is to be penalised for concealment of particulars of income or for furnishing inaccurate particulars of income. These are two different acts. Concealment of income is a .....

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..... when penalty proceedings are sought to be initiated by the Revenue under section 271(1)(c) of the Act of 1961, the specific ground which forms the foundation therefore has to be spelt out in clear terms. Otherwise, an assessee would not have proper opportunity to put forth his defence. When the proceedings are penal in nature, resulting in imposition of penalty ranging from 100 per cent. to 300 per cent. of the tax liability, the charge must be unequivocal and unambiguous. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the Revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting one or between the .....

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