TMI Blog2021 (3) TMI 398X X X X Extracts X X X X X X X X Extracts X X X X ..... e facts and the issue involved in the case of the assessee before us remains the same, we, thus, in terms of our observations recorded hereinabove find no reason to take a different view and are unable to persuade ourselves to sustain the penalty imposed by the A.O under Sec. 271(1)(c) - Decided in favour of assessee. - ITA No.7272/MUM/2018 - - - Dated:- 3-3-2021 - Shri Rajesh Kumar (Accountant Member) And Shri Ravish Sood (Judicial Member) For the Assessee : Shri Kumar Kale , A.R For the Revenue : Ms. Usha Gaikwad, D.R ORDER PER RAVISH SOOD, J.M: The present appeal filed by the assessee is directed against the order passed by the CIT(A)-45, Mumbai, dated 10.09.2018 which in turn arises from the penalty order passed by the A.O under Sec. 271(1)(c) of the Income Tax Act,1961 (for short Act ), dated 12.06.2017 for A.Y. 2014-15. The assessee has assailed the impugned order on the following grounds of appeal before us: Being aggrieved by the order dated 10.09.2018 passed by the learned Commissioner of Income Tax (Appeals)-45, Mumbai [ Ld. CIT(A) ] u/s 250 of the Income-tax Act, 1961 ( Act ), your appellant prefers this appeal, among others, on the fol ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on paid by the assessee for obtaining the aforesaid LTCG. (3% of ₹ 18,93,883/-) ₹ 56,816/-. At the time of culminating the assessment the A.O initiated penalty proceedings under Sec. 271(1)(c) for both of the aforesaid two additions for furnishing of inaccurate particulars of income with the view to concealment of income. 4. Subsequently, the A.O vide his order passed under Sec. 271(1)(c), dated 12.06.2017 imposed a penalty of ₹ 6,02,767/- on the assessee in respect of the aforesaid additions of ₹ 19,50,699/ - [₹ 18,93,883/- (+) ₹ 56,816/-]. 5. Aggrieved the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) not finding favour with the contentions advanced by the assessee dismissed the appeal. 6. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. At the very outset of the hearing of the appeal it was submitted by the ld. Authorized Representative (for short A.R ) for the assessee, that the A.O had wrongly assumed jurisdiction and without validly putting the assessee to notice as regards the default for which the impugned penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ell as the judicial pronouncements that have been pressed into service by them to drive home their respective contentions. Admittedly, on a perusal of the SCN , dated 23.12.2016, it stands revealed that the Assessing Officer had failed to strike off the irrelevant default while calling upon the assessee to explain as to why penalty u/s 271(1)(c) of the I.T Act may not be imposed on him. Insofar the validity of the jurisdiction assumed by the A.O is concerned, we find that the same has been assailed before us on the ground that as the irrelevant default in the Show cause notice, dated 23.12.2016 was not struck off by the A.O therefore, the assessee was not validly put to notice as regards the default for which penalty was sought to be imposed on him under Sec. 271(1)(c) of the I.T Act. 9. We have given a thoughtful consideration to the facts of the case and are persuaded to subscribe to the claim of the assessee that the A.O had in the aforesaid SCN , dated 23.12.2016 failed to point out the default for which penalty was sought to be imposed on him. In our considered view, as both of the two defaults envisaged in Sec. 271(1)(c) i.e concealment of income and furnishing of i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 274(1) of the I.T Act. We find that the fine distinction between the two defaults contemplated in Sec. 271(1)(c), viz. concealment of income and furnishing of inaccurate particulars of income had been appreciated at length by the Hon ble Supreme Court in its judgments passed in the case of Dilip Shroff Vs. Jt. CIT (2007) 210 CTR (SC) 228 and T. Ashok Pai Vs. CIT (2007) 292 ITR 11 (SC). The Hon ble Apex Court in its aforesaid judgments had observed that the two expressions, viz. concealment of particulars of income and furnishing of inaccurate particulars of income have different connotation. The Hon ble Apex Court being of the view that the non-striking off the irrelevant limb in the notice clearly reveals a non-application of mind by the A.O, had observed as under:- 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 has furnishe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td . (2021) 124 taxman.com 249 (SC) had dismissed the SLP of the revenue and upheld the order of the Hon ble High Court of Bombay, wherein the order of the Tribunal quashing the penalty imposed by the A.O for the aforesaid jurisdictional defect i.e not putting the assessee to notice about the default for which penalty u/s 271(1)(c) was sought to be imposed was upheld by the Hon ble High Court . 12. We find that as averred by the Ld. A.R. the indispensable obligation on the part of the A.O to clearly put the assessee to notice of the charge under the aforesaid statutory provision viz. Sec. 271(1)(c) had been deliberated upon at length by a coordinate bench of the Tribunal, i.e. ITAT C Bench, Mumbai in the case of M/s Orbit Enterprises Vs. ITO-15(2)(2), Mumbai (ITA No. 1596 1597/Mum/2014, dated 01.09.2017). The Tribunal in the aforementioned case had in the backdrop of various judicial pronouncements concluded that the failure to specify the charge in the Show cause notice clearly reflects the non-application of mind by the A.O, and would resultantly render the order passed under Sec. 271(1)(c) in the backdrop of the said serious infirmity as invalid and void ab initio. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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