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TMI Blog2020 (6) TMI 374X X X X Extracts X X X X X X X X Extracts X X X X ..... liabilities' the assessee subsequently filed a revised computation of income wherein it included an amount of Rs. 1,45,61,540/- being amount disallowable u/s 43B of the IT Act due to nonpayment of service tax. The AO noted from the tax audit report that there is clear mention of this amount as having not been paid within the stipulated time period and disallowable u/s 43B of the Act. Since the tax audit report was not furnished along with the return of income, the AO held that it was a deliberate attempt on the part of the assessee to suppress the amount. The AO, thereafter, completed the assessment at a total income of Rs. 1,79,51,350/- wherein he made an addition of Rs. 1,45,61,540/- being the service tax disallowable u/s 43B of the IT Act. 4. The assessee did not prefer any appeal against the order of the AO. Subsequently, the AO initiated penalty proceedings u/s 271(1)(c) of the IT Act. Rejecting the various explanations given by the assessee and observing that the assessee has concealed its particulars of income and furnished inaccurate particulars, levied penalty of Rs. 48,36,979/- being 100% of the tax sought to be evaded u/s 271(1)(c) of the IT Act, 1961. In appeal, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . ACIT, ITA No.1457/Del/2010, order dated 7th September, 2015 wherein similar view has been taken by the Tribunal. Referring to the audited financials of the assessee for the impugned assessment year, he submitted that the assessee has not claimed such service tax as a deduction in the Profit & Loss Account. He accordingly submitted that in view of the decisions cited (supra), penalty is not leviable u/s 271(1)(c) of the IT Act when the disallowance u/s 43B should not have been made. 8. He submitted that the ld.CIT(A) in assessee's own case for subsequent assessment year, i.e., A.Y. 2012-13, has deleted the addition made u/s 43B on account of non-payment of service tax liability, even though the assessee itself had added it back to its income while filing the revised computation of income. The ld.CIT(A) in the said order has deleted the addition on unpaid service tax amounting to Rs. 94,68,278/- and allowed the ground raised by the assessee. He submitted that the Revenue has not filed any appeal against the order of the Tribunal. 9. Referring to the copy of the assessment order, the ld. Counsel further submitted that there is no satisfaction recorded in the assessment order, ther ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that mere mistake in language used or mere non-striking off of inaccurate portion cannot by itself invalidate the notice under section 274. Accordingly penalty orders passed by the AO for different assessment years were held to be perfectly valid and there was no justification for quashing the same on the ground of absence of jurisdiction. He also relied on the following decisions:- i) Trimurti Engineering Works vs. ITO (2012) 150 TTJ 195 (Del); ii) Union of India vs. Dharmendra Textile Processors, 306 ITR 277 (SC); iii) Chairman SEBI vs. Shri Ram Mutual Fund (2006) 68 SCL 216 (SC); & iv) CIT vs. Zoom Communications P. Ltd. (2010) 327 ITR 510 (Del). 11. The ld. Counsel for the assessee in his rejoinder submitted that the Hon'ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Company Ltd. has approved and followed the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory (supra). So far as the decision of the Hon'ble Bombay High Court in the case of Smt. Kaushalya (supra) is concerned, he submitted that the Hon'ble High Court subsequently in the decision in the case CIT vs. Samson Perinchery (supra) has followe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 r.w.s. 271 have not been struck off. A perusal of the notice issued u/s 274 r.w.s. 271 dated 31.03.2004 shows that the inappropriate words in the said notice have not been struck off and it is a printed notice. Even the last line of the said notice only speaks of section 271 and does not even mention of section 271(1)(c) of the I.T. Act. We find an identical issue had come up before this Bench of the Tribunal in the case of Sahiwal Investment & Trading co. vs. ITO vide ITA No.4913/Del/2015 for assessment year 2006-07 order dated 18.07.2018 to which both of us parties. We find the Tribunal in the said decision while allowing the additional ground filed by the assessee has decided the issue in favour of the assessee by observing as under :- "12. Additional Ground No. (ii) is relating to absence of specific charge pointing out in the notice. It is pertinent to note here that the penalty order is based on furnishing of inaccurate particulars but the notice is not specifying exactly on which limb the penalty u/s 271(1)(c) has been initiated. From the notice dated 30.06.2013 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Revenue has been dismissed. Since there is no decision of the Jurisdictional High Court on this issue, therefore, we find merit in the argument of the ld. counsel for the assessee that if two views are available on a particular issue, the view which is favourable to the assessee has to be followed in the light of the decision of the Hon'ble Supreme Court in the case of Vegetable Products Limited (supra). We, therefore, set-aside the order of the ld. CIT(A) and direct the Assessing Officer to cancel the penalty so levied." 13. The Hon'ble Delhi High Court in the case of Sahara India Life Insurance Company Ltd. (supra), while deciding the issue of non-striking off of inappropriate words, has 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. Manjunatha Cotton & Ginning Factory 359 ITR 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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