TMI Blog2019 (12) TMI 310X X X X Extracts X X X X X X X X Extracts X X X X ..... a [ 1984 (1) TMI 36 - PUNJAB AND HARYANA HIGH COURT] and in the case of Harigopal Singh vs. CIT [ 2002 (8) TMI 65 - PUNJAB AND HARYANA HIGH COURT] and in the case of CIT vs. Nawab and Bros. [ 1974 (5) TMI 7 - ALLAHABAD HIGH COURT] . Taking into account, all the facts and circumstances, we are of the view that the penalty is not liable to be sustainable in the eyes of law. - Decided in favour of assessee. - I.T.A. No. 7446/Mum/2017 - - - Dated:- 27-11-2019 - Shri Rajesh Kumar, AM And Shri Amarjit Singh, JM For the Assessee : None For the Revenue : Mrs. Jothilakshmi Nayak (DR) ORDER PER AMARJIT SINGH, JM: The assessee has filed the present appeal against the order dated 10.10.2017 passed by the Commissioner of Income Tax (Appeals)-3, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y. 2012-13 in which the penalty levied by the AO has been order to be confirmed. 2. The assessee has raised the following grounds: - 1 The Ld. CIT(A) has erred in law and on facts in sustaining the order of the AO levying penalty u/s 271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd, the Ld. Representative of the Department has refuted the said contentions. The copy of notice dated 27.02.2015 is on the file in which the Assessing Officer nowhere specify any limb to levy the penalty because none of the charge was tick off in the notice. It is not in dispute that the penalty u/s 271(c) of the Act is leviable on account of the concealment of particular of income and on account of furnishing the inaccurate particulars of income. Both have different connotations. In this regard, the Hon ble Supreme Court has appreciated the distinction between both the limb in the case Dilip N. Shroff 161 taxman 218 (SC). As per the record, the assessment order speaks about levying the penalty on account of furnishing the inaccurate particulars of income but the notice nowhere specify any limb to levy the penalty. The notice is not justifiable in view of the law settled by the Bombay High Court in the case of CIT-11 Vs. Samson Perinchery. At the time of argument, the Ld. Representative of the assessee has also placed reliance upon the finding of the Hon ble ITAT in ITA. No. 2555/M/2012 titled as Meherjee Cassinath Holdings P. Ltd. Vs. ACIT, Circle-4(2). The relevant para is here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid infirmity in the notice has been sought to be demonstrated as a reflection of non-application of mind by the Assessing Officer, and in support, reference has been made to the following specific discussion in the order of Hon'ble Supreme Court in the case of Dilip N. Shroff (supra):- 83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non-application of mind. It was also bound to comply with the principles of natural justice. (See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718] 9. Factually speaking, the aforesaid plea of assessee is borne out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... red the said argument set-up by the ld. CIT-DR and find that a similar issue had come up before our coordinate Bench in the case of Dr. Sarita Milind Davare (supra). Our coordinate Bench, after considering the judgment of the Hon'ble Bombay High Court in the case of Smt. Kaushalya Ors., (supra) as also the judgments of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) and Dharmendra Textile Processors, 306 ITR 277 (SC) deduced as under :- 12. A combined reading of the decision rendered by Hon‟ble Bombay High Court in the case of Smt. B Kaushalya and Others (supra) and the decision rendered by Hon‟ble Supreme Court in the case of Dilip N Shroff (supra) would make it clear that there should be application of mind on the part of the AO at the time of issuing notice. In the case of Lakhdir Lalji (supra), the AO issued notice u/s 274 for concealment of particulars of income but levied penalty for furnishing inaccurate particulars of income. The Hon‟ble Gujarat High Court quashed the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon‟ble Kera ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer records that the penalty proceedings u/s 271(1)(c) of the Act are to be initiated for furnishing of inaccurate particulars of income. However, in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act of even date, both the limbs of Sec. 271(1)(c) of the Act are reproduced in the proforma notice and the irrelevant clause has not been struck-off. Quite clearly, the observation of the Assessing Officer in the assessment order and non-striking off of the irrelevant clause in the notice clearly brings out the diffidence on the part of Assessing Officer and there is no clear and crystallised charge being conveyed to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of non-striking off of the irrelevant clause in the notice shows that the charge being made against the assessee qua Sec. 271(1)(c) of the Act is not firm ..... X X X X Extracts X X X X X X X X Extracts X X X X
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