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TMI Blog2019 (10) TMI 355X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 8 months from the date of purchase and on which concessional rate of tax was claimed. The Assessing Officer thereafter initiated penalty proceedings u/s. 271 (1) (c) of the IT Act. Rejecting the various explanation given by the assessee and relying on various decisions the Assessing Officer levied penalty of Rs. 3,59,591/- u/s. 271 (1) (c) of the IT Act. being 100% of the tax sought to be evaded. In appeal the Ld. CIT(A) sustained the penalty so levied by the Assessing Officer. 4. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal :- 1. The order of CIT (A) is bad in law and on facts. 2. The CIT(A) has failed to appreciate that the proceedings of 271(1)(C) are void ab initio as the same has been initiated on the basis of non specific notice issued under section 274. 3. The CIT(A) has erred in not appreciating that the impugned penalty has been initiated and levied without asking any reply from the assessee/ without issuing any show cause to explain, during the course of assessment proceeding as evident from order sheet entry. 4. The CIT(A) has further erred in not appreciating that the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... concern namely Shobhit Gupta (HUF) Vs. ITO vide ITA No.6765/Del/2018 order dated 03.04.2019 he submitted that under identical circumstances the Tribunal has cancelled the penalty so levied by the Assessing Officer and sustained by the CIT(A). He accordingly submitted that this being a covered matter in favour of the assessee the penalty so levied and sustained by the CIT(A) is not in accordance with law and, therefore, has to be deleted. 6. So far as the merit of the case is concerned he submitted that the assessee has shown the transaction of sale and purchase of shares in an open and bonafide manner and, therefore, it cannot be said to be a case of concealment of income. Further the assessee has already paid the tax by surrendering the amount and the various documents filed by the assessee during the course of assessment proceedings have not been found to be false or untrue. Referring to the decision of Hon'ble Supreme Court in the case of CIT Vs. Reliance Petroproducts reported in 322 ITR 158 and various other decisions he submitted that the penalty levied by the Assessing officer and sustained by the CIT(A) should be deleted. 7. The Ld. DR on the other hand heavily relied on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore me at 11:30 A.M. on 23.01.2017 and show cause why an order imposing a penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not wish to avail of this an opportunity of being heard in person or through authorised representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271 of l.T. Act, 1961. (Archana Chaturvedi) Income Tax Officer Ward-35(4), New Delhi" 10. I find under identical circumstances the coordinate Bench of the Tribunal in the case of Sohbit Gupta (HUF) a sister concern of the assessee has cancelled the penalty levied u/s. 271 (1) (c) of the Act by observing as under :- 6. We have heard the rival submissions perused the orders of lower authorities and materials available on record. We find that the facts in the present appeal are not in dispute and the Assessing Officer in the notice issued u/s 274 read with section 271(l)(c) dated 23.12.2016 has not specified the exact charge, viz., whether the charge is that the assessee has furnished inaccurate particulars of income or "concealed particulars of income" by striking out the irrelevant por ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter 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." 8. Bare perusal of the notice issued u/s 27I(l)(c) apparently goes to prove that the Assessing Officer initiated the penalty proceedings by issuing the notice u/s 274/271(l)(c) of the Act without specifying whether the assessee has concealed "particulars of income" or assessee has furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notice in this case has been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271 (1 )(c) of the Act. 9. The penalty provisions of section 271(l)(c) of the Act are attracted where the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271 (1 )(c) of the Act carry different meanings. Therefore, it was imperative for the Assessing Officer to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9 order dated 02.08.2019 has observed as under :- "21. The Respondent had challenged the upholding of the penalty imposed under Section 271 (1) (c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) , the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of2016 by order dated 5th August, 2016. " 12. Respectfully following the decisions cited above I am of the considered opinion that levy of penalty by the Assessing Officer u/s. 271 (1) (c) of the IT Act which has been upheld by the CIT(A) is bad in law since the notice does not specify under which limb of section 271 (1) (c) of the IT Act the penalt ..... X X X X Extracts X X X X X X X X Extracts X X X X
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