TMI Blog2020 (6) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... imposed u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the Act ). 2. None appeared for the assessee. However, we take note from the grounds of appeal raised by the assessee i.e. ground no.3 which is against the invalid notice of AO imposing penalty on the assessee, which is reproduced as under: 3. For that the notice issued by Ld. AO u/s. 274 read with sec. 271 of I. T. Act, 1961 dated 26.10.2016 is void ab initio and illegal because the Notice did not specify whether the appellant has concealed particulars of income or has furnished inaccurate particulars of such income and hence, so there is breach of principle of natural justice and ultimately the order imposing penalty even otherwise cannot be sustained. Even in the assessment order dated 26.10.16, the Ld. AO as mentioned penalty proceedings u/s. 271(1)(c) is initiated separately for furnishing inaccurate particulars of income/concealment of income and consequently the notice is null and void. 3. We also note from the perusal of the impugned order that the assessee has challenged the same ground before the Ld. CIT(A) . However, the Ld. CIT(A) has not given any credence to the ground raise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal has noted as under: 7. The learned DR submitted that the Hon ble Calcutta High Court in the case of Dr.Syamal Baran Mondal Vs. CIT (2011) 244 CTR 631 (Cal) has taken a view that Sec.271 does not mandate that the recording of satisfaction about concealment of income must be in specific terms and words and that satisfaction of AO must reflect from the order either with expressed words recorded by the AO or by his overt act and action. In our view this decision is on the question of recording satisfaction and not in the context of specific charge in the mandatory show cause notice u/s.274 of the Act. Therefore reference to this decision, in our view is not of any help to the plea of the Revenue before us. 8. The learned DR relied on three decisions of Mumbai ITAT viz., (i) Dhanraj Mills Pvt. Ltd. Vs. ACIT ITA No.3830 3833/Mum/2009 dated 21.3.2017; (ii) Earthmoving Equipment Service Corporation Vs. DCIT 22(2), Mumbai, (2017) 84 taxmann.com 51 (iii) Mahesh M.Gandhi Vs. ACIT Vs. ACIT ITA No.2976/Mum/2016 dated 27.2.2017. Reliance was placed on two decisions of the Hon ble Bombay High Court viz., (i) CIT Vs. Kaushalya 216 ITR 660(Bom) and (ii) M/S.Mah ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that case was deleted for so many reasons and not solely on the basis of defect in show cause notice u/s.274 of the Act. This is not factually correct. One of the parties before the group of Assessees before the Karnataka High Court in the case of Manjunatha Cotton Ginning (supra) was an Assessee by name M/s.Veerabhadrappa Sangappa Co., in ITA NO.5020 OF 2009 which was an appeal by the revenue. The Tribunal held that on perusal of the notice issued under Section 271(1)(c) of the Act, it is clear that it is a standard proforma used by the Assessing Authority. Before issuing the notice the inappropriate words and paragraphs were neither struck off nor deleted. The Assessing Authority was not sure as to whether she had proceeded on the basis that the assessee had either concealed its income or has furnished inaccurate details. The notice is not in compliance with the requirement of the particular section and therefore it is a vague notice, which is attributable to a patent non application of mind on the part of the Assessing authority. Further, it held that the Assessing Officer had made additions under Section 69 of the Act being undisclosed investment. In the appeal, the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the Assessee had concealed particulars of income and merely because in the show cause notice u/s.274 of the Act, there is no mention whether the proceedings are for furnishing inaccurate particulars or concealing particulars of income, that will not vitiate the penalty proceedings. In the present case there is no whispher in the order of assessment on this aspect. We have pointed out this aspect in the earlier part of this order. Hence, this decision will not be of any assistance to the plea of the revenue before us. Even otherwise this decision does not follow the ratio laid down by the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning (supra) in as much as the ratio laid down in the said case was only with reference to show cause notice u/s.274 of the Act. The Hon ble Court did not lay down a proposition that the defect in the show cause notice will stand cured if the intention of the charge u/s.271(1) (c ) is discernible from a reading of the Assessment order in which the penalty was initiated. 14. From the aforesaid discussion it can be seen that the line of reasoning of the Hon ble Bombay High Court and the Hon ble Patna High Court is that issua ..... X X X X Extracts X X X X X X X X Extracts X X X X
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