TMI Blog2022 (4) TMI 1314X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty under Section 271(l)(c) was not leviable when the notice issued by Assessing Officer did not specify as to whether the proceedings were initiated for concealment of particulars of income or for furnishing of inaccurate particulars of income. We accordingly set aside the levy of penalty levied by Assessing Officer and that was confirmed by the learned Commissioner of Income-Tax (Appeals). Thus, the appeal of the Assessee is allowed. - ITA.No.8812/Del./2019 - - - Dated:- 27-4-2022 - Shri Anil Chaturvedi, Accountant Member And Shri Anubhav Sharma, Judicial Member For the Assessee : Dr. Rakesh Gupta, And Shri Somil Aggarwal, Advocates. For the Revenue : Shri Sanjay Kumar, Sr. DR ORDER PER ANIL CHATURVEDI, A.M. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n confirming the action of Ld. AO in imposing penalty of ₹ 26,51,420/- u/s 271(1)(c) and framing the impugned penalty order without considering the facts and circumstances of the case and without providing adequate opportunity of being heard and without observing the principle of natural justice. 2. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in not quashing the impugned penalty order passed by Ld. AO in imposing penalty of ₹ 26,51,420/- u/s 271(1)(c) and that too without assuming jurisdiction as per law and the impugned penalty order being illegal and void ab initio. 3. That in any case and in any view of the matter, action of Ld CIT(A) in confirming the acti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f ₹ 1,50,00,000/- and had earned long term capital gain of ₹ 1,17,00,867/-. He submitted that assessee decided to invest the sale consideration in purchase of another residential house property and he was advised that if the assessee makes investment in house property within two years of sale, he would be eligible to claim deduction and there will be no capital gain tax liability. He submitted that assessee was not made aware of the requirement of depositing the funds in the capital gain saving account scheme for claiming deduction. He submitted that the assessee being not aware about the intricacies of Income Tax Act, invested the sale consideration in Mutual Funds in order to keep it readily available for utilisation for purch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nted that the notice of penalty is vague as the A.O. has not struck-off the inapplicable clauses. He submitted that it is a settled position of law that notice under section 274 r.w.s. 271(1)(c) should specifically state the ground on which penalty proceedings have been initiated i.e., whether penalty has been levied for concealment of particulars of income or for furnishing inaccurate particulars of income. He submitted that mechanical signing printed form without striking-off inapplicable portion would not satisfy the requirement of law and in support of the aforesaid contentions, he placed reliance on the decision of Hon ble Delhi High Court in the case of Pr. CIT vs., Sahara India Life Insurance Company Ltd., reported in [2021] 432 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21. The Respondent had challenged the upholding of the penalty imposed under Section 271(l)(c) of the Act, which was accepted b y the ITAT. It followed the decision of the Karnataka High Court in CIT vs. Manjunatha Cotton Ginning Factory 359 565 (Kar) and observed that the notice issued by the Assessing Officer would be bad in law if it did not specify which limb of Section 271(l)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in CIT vs. SSA s Emerald Meadows (2016) 73 Taxman.com 241 (Kar.), the appeal against which was dismissed by the Hon' ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if the notice contains no caveat that the inapplicable portion be deleted, it is in the interest of fairness and justice that the notice must be precise. It should give no room for ambiguity. Therefore, Dilip N. Shroff disapproves of the routine, ritualistic practice of issuing omnibus show-cause notices. That practice certainly betrays non-application of mind. And, therefore, the infraction of a mandatory procedure leading to penal consequences assumes or implies prejudice. .. . 191. As a result, we hold that Dilip N. Shroff treats omnibus show-cause-notices as betraying nonapplication of mind and disapproves of the practice, to be particular, of issuing notices in printed form without deleting or striking off the inap ..... X X X X Extracts X X X X X X X X Extracts X X X X
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