TMI Blog2023 (12) TMI 714X X X X Extracts X X X X X X X X Extracts X X X X ..... shing inaccurate particulars. Tribunal notes that a lack of clarity was apparent upon perusal of paragraph four (4) of the penalty order. According to us the view taken by the Tribunal is correct. The respondent/assessee was entitled to know, clearly, the charge levelled against it. As adverted to in the Unitech Reliable Projects Pvt. Ltd. [ 2023 (6) TMI 1219 - DELHI HIGH COURT] case, the imposition of a penalty entails several consequences. The AO is required to apply his mind to the material and indicate, clearly, to the assessee what is being put against him. In other words, which limb of Section 271(1)(c) of the Act is attracted in the given facts and circumstances of the case. It is our view, that this clarity would be necess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vied. 4.1 In other words, the AO should have stipulated as to whether the penalty was proposed to be imposed on the respondent/assessee for concealment of particulars of its income, or furnishing inaccurate particulars. 4.2 Both limbs find mention in Section 271(1)(c) of the Act. 5. In the impugned order, the Tribunal notes that a lack of clarity was apparent upon perusal of paragraph four (4) of the penalty order. 5.1 We can do no better than to extract paragraph four (4) of the penalty order, as embedded in paragraph seven (7) of the impugned order passed by the Tribunal: Since, the above additions were treated as concealment of income/furnishing inaccurate particulars of income by the assessee, a notice u/s: 274 r.w.s. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd., which in our opinion, provides the rationale as to why it is necessary to indicate to the assessee the specific limb of Section 271(1)(c) of the Act under which penalty proceedings are triggered against him: 15. According to the Tribunal, the notice dated 14.03.2015 issued under Section 274 read with section 271(1)(c) of the Act did not specify, as to the limb under which penalty was sought to be imposed. In other words, the notice which was served on the respondent/assessee did not indicate, as to whether penalty was being levied on account of concealment of income, or for the reason that it had furnished inaccurate particulars. The Tribunal, based on the order of the Supreme Court in CIT v SSA s Emerald Meadows [2016] 73 taxma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the Assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f which one of us [i.e., Rajiv Shakdher, J.] was a party has reached the same conclusion in PCIT vs. Minu Bakshi 2022 (7) TMI 1307-Delhi. 21. Penalty proceedings entail civil consequences for the assessee. The AO is required to apply his mind to the material particulars, and indicate clearly, as to what is being put against the respondent/assessee when triggering the penalty proceedings. 22. In case the AO concludes, that a case is made out under Section 271(1)(c) of the Act, he needs to indicate, clearly, as to which limb of the said provision is attracted. The reason we say so is, that apart from anything else, the pecuniary burden may vary, depending on the infraction(s) committed by the respondent/assessee. In a given case ..... X X X X Extracts X X X X X X X X Extracts X X X X
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