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TMI Blog2018 (4) TMI 1756X X X X Extracts X X X X X X X X Extracts X X X X ..... 6,85,000/-. The assessment was completed on 01.02.2013 assessing the total income at Rs. 55,88,280/-. The Assessing Officer while passing the assessment made the addition of Rs. 39,03,238/- on account of undisclosed investment in commodities and initiated the penalty under section 271(1)(c) of the Act. The Assessing Officer levied the penalty of Rs. 13,26,711/- being minimum penalty @ 100% of the amount of income sought to be evaded. On appeal before the ld. CIT(A), the action of Assessing Officer was confirmed. Thus, further aggrieved by the order of ld. CIT(A), the assessee has filed the present appeal before us. 3. We have heard ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the Revenue and perused the material available on record. The ld. AR of the assessee submits that while issuing the show-cause notice, the Assessing Officer has not strike out the inappropriate portion of the notice specifying, if the show-cause notice is issued for concealing the particulars of income or furnishing the inaccurate particulars. Thus, the notice was issued without application of mind. The Assessing Officer was not sure, if the penalty initiate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... statement of assessee was also recorded under section 131 of the Act on 22.01.2013. The assessee furnished computation of trading account issued by India Bulls for period of 01.04.2009 to 31.03.2010. The Assessing Officer noted that the assessee disclosed source of income by salary from M/s Orian Commodities & Services Pvt. Ltd. in its return of income. The assessee has undertaken trading transaction of huge amount, periodically in various commodities. The trading transactions are rooted through bank account maintained with Kotak Mahindra Bank. On the basis of statement of Kotak Mahindra Bank, the Assessing Officer noted the peak balance of Rs. 39,03,238/- as on 29/08/2009. The assessee explained that such source of peak amount was received as a loan from his friend namely Uma Shanti on 29.09.2008 of Rs. 39,00,000/-. The Assessing Officer on the basis of peak credit in the bank account and the statement of assessee recorded, made the addition of Rs. 39,03,238/- on the basis of peak credit as undisclosed investment in commodities. The addition in the assessment order was made on estimation basis. No appeal was filed against the addition. The Assessing Officer initiated the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of income' and 'furnishing of inaccurate particulars of income' referred to in Sec. 271(1)(c) of the Act denote different connotations. In fact, this distinction has been appreciated even at the level of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T. Ashok Pai, 292 ITR 11 (SC). Therefore, if the two expressions, 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, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orded a satisfaction that penalty proceedings are initiated u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income. In our considered opinion, the attempt of the ld. CIT-DR to demonstrate application of mind by the Assessing Officer is no defence inasmuch as the Hon'ble Supreme Court has approved the factum of non-striking off of the irrelevant clause in the notice 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 (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 invalidat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e opportunity of the assessee since he did not know what exact charge he had to face. In this back ground, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified." In the instant case also, we are of the view that the AO 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Austin vs. ITO(supra) and Sansui Steel Pvt. Ltd. vs. ITO (supra) are not applicable on the facts of this case. As we have observed in Meherjee Cassinath Holdings Pvt. Ltd. (supra) while relying on the judgment of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T. Ashok Pai, 292 ITR 11 (SC), wherein it was held the two expressions, 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. With utmost regards to the decision of coordinate bench, we noted that the decisions of Hon'ble Apex Court were not brought to the notice of coordinate benches. With this observation, we accepted the legal submissions of the ld. AR for the assessee and allow the grounds of appeal raised by the assessee. As we have allowed the appeal of the assessee on legal ground, the discussion on merit and other grounds of appeal became academic. 8. In the result, appeal filed by assessee is allowed. Order prono ..... X X X X Extracts X X X X X X X X Extracts X X X X
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