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TMI Blog2019 (12) TMI 447X X X X Extracts X X X X X X X X Extracts X X X X ..... d & bad in law as from the notice issued u/s 274 r.w.s 271(1)(c) of the Act it is not discernable as to whether the penalty proceedings was initiated for furnishing of inaccurate particulars of income or concealment of income and therefore, the impugned penalty order passed deserves to be quashed. 2. Under the facts and circumstances of the case, the Id. CIT(A) has grossly erred in passing the appellate order without affording adequate opportunity of being heard to the appellant. 3. Under the facts and circumstances of the case, the Ld.First Appellate Authority has grossly erred in upholding the action of ld. Assessing Authority imposing the penalty of 5,62,988/-, 83,246/- and 18,972/- u/s 271(1 )(c) of the Income Tax Act, 1961 for A.Y. 2008-09, 2009-10 and 2010-11 respectively which is highly injudicious, unwarranted, against the facts of the case and bad at law. 4. The appellant prays for leave to add, amend, alter or withdraw any grounds of appeal. 3. Briefly stated the facts necessary for adjudication of the controversy at hand are : on the basis of assessment orders framed u/s 143(3), 153A of the Act at the income of Rs. 18,38,000/- , 5,96,074/- and 5,65,920/- for A.Y. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of Delhi in Pr. CIT vs. Sahara India Life Insurance Company Ltd. in ITA 475/2019 order dated 02.08.2019. ITA No. 2645to2647/Del./2017 9. In order to proceed further, we would like to peruse the notices issued by AO u/s 274 read with section 271(1)(c) of the Act to initiate the penalty proceedings for A.Y. 2008-09, 2009-10 and 2010-11 which are extracted as under for ready perusal:- "NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. (A.Y. 2008-09) Asstt. Commissioner of Income Tax Central Circle 4, New Delhi. Dated: 23.12.2011 To Smt. Harmeet Kaur Sran M-105, Guru Har Kishan Nagar Paschim Vihar, New Delhi Whereas in the course of proceedings before me for the assessment year 2008-09 it appears to me that you :- have without reasonable cause failed to comply with a notice under section 142(1)/143(2) of the Income Tax Act, 1961 dated......... have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1, 2,3,4 and 5. Undisclosed Income in the case of search. You are hereby requested to appear before me at 11.30 AM/PM on 23/01/12 and show cause why an order imposing a penalty o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2 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 yourself of this opportunity of being heard in person of through authorized 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. Sd/- Assessing Officer, Asstt. Commissioner of Income Tax Central Circle 4, New Delhi" 10. Bare perusal of the notices issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee go to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for "concealment of particulars of income" or "furnishing of inaccurate particulars of such income" by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. 11. Hon'ble High Court of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , relying on decision of Division Bench of Karnataka High Court rendered in case of CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 1TR 565/218 Taxman 423/35 taxmann.com 250, allowed appeal of assessee holding that notice issued by Assessing Officer under section 274 read with section 271 (1 )(c) was bad in law, as it did not specify under which limb of section 271 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by revenue, same was liable to be dismissed - Held, yes [Para 2] [In favour of assessee]" 13. Hon'ble Delhi High Court in case of Pr. CIT vs. Sahara India Life Insurance Company Ltd. (supra) while deciding the identical issue held 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. Manjunath ..... X X X X Extracts X X X X X X X X Extracts X X X X
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