TMI Blog2022 (5) TMI 1571X X X X Extracts X X X X X X X X Extracts X X X X ..... Ms. Puja Bajaj, AR. For the Revenue : Shri G.N Singh, DR. ORDER PER RATHOD KAMLESH JAYANTBHAI, AM: This appeal is filed by the assessee aggrieved from the order of the Commissioner of Income Tax (Appeal)- I, Raipur [ Here in after referred as Ld. CIT(A) ] for the assessment year 2014-15 dated 20.06.2018. 2. The hearing of the appeal was concluded through audio-visual medium on account of Government guidelines on account of prevalent situation of Covid-19 Pandemic, both the parties have placed their written as well as oral arguments during this online hearing process. 3. The appellant has taken following grounds in this appeal; 1. In the facts circumstances of the case, penalty order passed by the AO is illegal and invalid inasmuch as the show cause notice issued by the AO is illegal and not in accordance with provisions of law. Ld. CIT(A) erred in confirming the penalty without appreciating the correct position of law. 2. In the facts and circumstances of the case and in law, Ld. CIT (A) erred in confirming the penalty of Rs. 2,18,910/- imposed by the AO u/s 271(1)(c). The penalty imposed by the AO and confirmed by CIT (A) is not justified ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... articulars of income within the meaning of Section 271(1)(c) of the Act to the tune of Rs 10,62,670/-. The minimum penalty leviable in this case, equal to the tax sought to be evaded by reason of the concealment of particulars of Income by furnishing inaccurate particulars of income comes to Rs 2,18,910/- whereas the maximum penalty leviable comes to Rs 6,56,730/-. Considering the facts and circumstances of the case I impose a penalty of Rs 2,18,910/- (Rupees two lacs eighteen thousand nine hundred ten only) under Section 271(1)(c) of the Act. The assessee is directed to pay the penalty of Rs 2,18,910/ in addition to the tax payable by him. 5. Aggrieved from the order of the ld. AO the assessee filed an appeal before the ld. CIT(A) who has sustained the levy of penalty and the relevant findings of the ld. CIT(A) is as under : Finding of the CIT(A) 2.3 Capital gain was not worked out by the assessee and was not offered. The sale consideration was however credited in the books. As per Explanation to section 147, if any information can be deduced from records by due diligence, the assessee cannot claim that such information was furnished. before the AO. In the present case wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same is reproduced for the sake of brevity of the facts: Submission of the assessee The AO issued show cause notice dated 16.12.2016 and 26.05.2017. In the penalty order, the AO concluded that the appellant has furnished inaccurate particulars of income and consequently concealed particulars of income. He therefore levied penalty of Rs. 2,18,910/- being the minimum penalty. In this regard, it is humbly submitted that: - As regards ground no. 1 The present appeal has been filed against the penalty order passed by the AO u/s 271(1)(c), imposing penalty of Rs. 2,18,910/-. In this case, the return of income was filed declaring nil income which has been assessed by the AO u/s 143(3) at Rs. 10,62,666/-, The addition made by the AO is on account of long term capital gain on sale of land. In the assessment order, the AO observed that the appellant has sold a piece of land but capital gain thereon was not disclosed in the return and that during assessment proceedings, the appellant offered capital gain. In the assessment, the AO concluded that the appellant has concealed its income and has furnished inaccurate particulars. 1. At the outset, it is submitted that the appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The case of appellant is squarely covered by the above decision of Hon'ble Supreme Court. In the case of appellant also, the sale transaction is reflected in the balance sheet which was filed with the return and it was a case of bonafide human error. As regards ground no. 2 1. While initiating penalty proceedings in the assessment order, the AO has mentioned in para no. 3 that the appellant has concealed the income and has furnished inaccurate particulars. Again in the penalty order, the AO concluded vide para no. 6 that the appellant has furnished inaccurate particulars of income and consequently concealed particulars of income. 2. As held in Dilip N. Shroff vs JCIT (2007) 291 ITR 519, 551 (SC) and Sachin Arora vs ITO in ITA no. 118/Agra/2015 order dated 19.12.2017, it is a settled position that the term concealment and furnishing inaccurate particulars are different and distinct, having different and separate meanings. It is also settled that the two terms are not interchangeable and one cannot be replaced by the other. In other words, both the terms signify different default and therefore, it was incumbent upon the AO to have framed definite charge against t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 118/Agra/2015 order dated 19.12.2017, after considering a number of decisions on the subject. In Sachin Arora vs ITO in ITA no. 118/Agra/2015 order dated 19/12/2017, a similar situation had arisen. The AO initiated penalty for a specific charge and in the accompanying notice, the assessee was called upon to explain on both the charges. It was held by Hon'ble ITAT that the notice issued by the AO suffers from non-application of mind. The penalty was held to be illegal and not sustainable. The relevant findings are given in para no. 52 the order of Hon'ble ITAT. In the above case, definition of the term concealment and inaccurate particulars was considered. Concealment was understood to mean to hide or suppress the truth and inaccurate was understood to mean suggesting or stating a falsehood. It was further held that both the terms have different meanings. In view of above explanation, it is requested that the penalty imposed by AO may kindly be cancelled/quashed. 7. Per contra the Ld. DR supported the orders of the lower tax authority and the conviction of Ld. CIT(A) and also stated that it is mere technical error and the same may be seen accordingly and h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , and Ashok Paid Vs CIT reported at 292 ITR 11. In the light of aforesaid judicial precedents, it is imperative on the part of Ld. AO to make the assessee aware in the notice issued u/s 274 r.w.s. 271(1)(c) of the Act as to which one of the two limbs is alleged against him for the purposes of imposition of penalty and unless it is made aware of any specific charge against him, the proceedings shall be violative of the principles of natural justice inasmuch as the assessee would not be in a position to put up his necessary defence appropriately. 7.2 One has to appreciate the point being canvassed by the assessee before us, which is based on the tone and drift of the notice issued u/s 274 r.w.s. 271(1)(c) of the Act dt 14/01/2015, a copy of which has been placed on record which de-facto reads as under; During the course of assessment proceedings u/s 143(3) of the Income Tax, 1961 for A.Y 2010-11. Penalty proceedings u/s 271(1)(c) of the Income Tax Act, 1961 were initiated. Therefore, you are hereby requested to appear before me at my office on 29/01/2015 at 11.30 A.M and show cause why an order imposing a penalty on you should not be made u/s 271 of the Income Tax Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... himself submitted that VAT of Rs.10051/- is refundable means assets or in other word the refundable VAT is VAT Credit (purchase). Therefore, considering the above, I hereby add of Rs.2,51,275/- in the hand of the assessee u/s 69C with initiating penalty proceeding u/s-271(1)(c) of Income Tax Act, 1961. (Emphasis Supplied) 7.6 In our considered opinion, the attempt of the Ld. DR to demonstrate application of mind by the Assessing Officer is of no defence, inasmuch as the Hon'ble Supreme Court has approved the factum of non-specifying relevant clause in the notice is reflective of non-application of mind by the Assessing Officer. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court in plethora of cases inter-alia CIT Vs Samson Pericherry , PCIT Vs Goa Dorado and PCIT Vs New Era Sova Mine wherein it is categorically held that, No notice could be issued under Section 274, read with Section 271(1)(c), of the IT Act without indicating which particular limb of Section 271(1)(c) was invoked for initiating the penalty proceedings 7.7 To demonstrate the voice of non-application of mind by the Ld. AO, we shall al ..... X X X X Extracts X X X X X X X X Extracts X X X X
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