TMI Blog2020 (4) TMI 750X X X X Extracts X X X X X X X X Extracts X X X X ..... ER KUL BHARAT, J.M: This appeal by the assessee is directed order of the CIT(A)-II, Indore dated 24.01.2019 for the assessment year 2015-16. The assessee has raised following grounds of appeal: 1. The Hon'ble CIT(A)-II has erred in upholding the penalty imposed u/s 271(1)(c) of the Income Tax Act 1961, at ₹ 8,00,000/- 2. The Hon'ble CIT(A)-II erred in law by passing the order without giving proper opportunity to the assessee. Such an order so passed is not sustainable in law should be quashed. The same may kindly be quashed. 3. the Penalty levied under section 271(1)(c) without specifying charge in show cause notice is not sustainable in law hence Hon'ble CIT(A)-II has erred in law by upholding such an order. Hence, the order so passed should be quashed. The same may kindly be quashed. 4. The appellant craves leave to add any new ground of appeal or alter, amend or delete any of the above grounds of appeal. 2. Brief facts of the case are that the assessee filed return of income declaring total income at Rs. Nil. However, the AO completed the assessment by making assessment of ₹ 24,33,996/- on account of disallowances of loss ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ITA No 619 to 624/Ind/2017 dated 17.12.2018 I.T.A.T., Indore Bench 4. Kirit Kumar C. Thacker V/s JCIT (2016) 47 CCH 0038 RajkotTrib dated 06.05.2016 ITAT Rajkot Bench Ahmedabad 5. Sejal Exports (India) vs. ACIT (I.T.A. No.5724,5727 and 5729/Mum/2012), I.T.A.T. Mumbai Bench 6. Per contra Ld. DR vehemently argued supporting the orders of the lower authorities and reliance was also placed in the following judgments favouring the revenue on the issue of levying penalty on the earned disclosed income surrendered during the course of search: 1. Sandeep Chandak vs. Pr. CIT, Kanpur, (2018) 93 taxmann.com 406 (SC) 2. CIT vs. Prasanna Dugar (2015) 59 taxmann.com 99 ( High Court of Calcutta) 3. Pr. CIT, Kanpur vs. Shri Sandeep Chandak on 27.11.2017 (High Court of Allahabad 7. We have heard rival contentions and perused the record placed before us. With regard to the appeal raised against levy of penalty u/s 271(1)(c) of the Act ground No.3 has been raised as a legal ground. 8. We will first take up legal ground which challenges the legality of the penalty proceedings being void ab initio and bad in law as the penalty notice 274 of the Act is alleged to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty has been levied. Now in a case whether the notice u/s 274 of the Act suffers from a defect by virtue of which no specific charge is leveled against the assessee, as to whether the penalty has been levied for concealing of particulars of income or for furnishing inaccurate particulars of income, we find that Hon'ble Jurisdictional High Court in the case of Pr. CIT V/s Kulwant Singh Bhatia(supra) has dealt with the same and Hon'ble Court has dismissed the revenue s appeal setting aside the order of penalty imposed by the authorities by referring to the judgment of Hon'ble Apex Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565(Karnataka) as well as judgment of Hon'ble Apex court in the case of CIT V/s SSA S Emerald Meadows (2016) 73 taxmann.com 248 (SC) and observed as follows: On due consideration of the arguments of the Learned counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that Learned Tribunal has rightly relying on the decision of CIT V/s Manjunath Cotton Ginning Factory and CI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on with the penalty proceedings u/s, 271(1) (c) for the assessment year(s) 2008-09 you are requested to attend my office on 18.01. 2010 at 11.00 AM to show cause why penalty should not be imposed. However. if you do not wish to be heard in person in this regard, you may submit your written submissions so as to reach me by the above date which will be considered before disposal of the matter. Sd/- ( Shrlkant Namdeo ) Deputy GommissfsonerOf1ncome Tax-1(1}, Bhopal Bhopal 13. From perusal of the above show cause notice we find that the Ld.A.O has merely mentioned the section but the specific charge i.e. whether the penalty have been initiated for concealment of particulars of income or for furnishing inaccurate particulars of income has not been mentioned. Now whether such type of notice which does not speak about the specific charge leveled against the assessee is valid and tenable in the eyes of law needs to be examined. 14. We find that similar issue came up before the jurisdictional High Court in the case of Shri Kulwant Singh Bhatia (supra) wherein the Hon'ble Court discussed the judgment of Hon'ble High Court in the case of CIT V/s Manju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer. We accordingly direct to delete the penalty of ₹ 16,00,000/- imposed u/s 271(1)(c) on this ground itself. We accordingly allow the additional ground raised by the assessee on the legality of the penalty proceedings initiated u/s 271(1)(c) of the Act. Since the penalty u/s 271(1)(c) also has been dealt on the preliminary points other arguments of the assessee dealing with the merits of the levy of penalty are not been dealt with, as the same are rendered academic in nature and the appeal of the assessee for the Assessment Year 2008-09 is allowed . 12. Since the facts in the instant appeal are similar to those adjudicated by us in the case of Varad Mehta (supra), we therefore respectfully following above referred judgments and in the given facts and circumstances of the case are of the considered view that the alleged notice issued u/s 271(1)(c) of the Act is invalid, untenable and suffers from the infirmity of non application of mind by the Assessing Officer. Since we have held the notice u/s 274 of the Act as invalid, the subsequent proceeding u/s 271(1)(c) of the Act are thus held to be void ab initio. We accordingly allow the legal ground raised by the assessee on ..... X X X X Extracts X X X X X X X X Extracts X X X X
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