SHRI ROSHAN LAL SAHCHETI,BHILWARA vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, AJMER

ORDER PER: R.C. SHARMA, A.M. This is an appeal filed by the assessee against the ex parte order of ld.CIT(A)-2, Udaipur dated 21/02/2019 for the A.Y. 2011-12 in the matter of imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961 (in short, the Act). Grounds taken by the assessee reads as under: “1. Under the facts and circumstances of the case, the order passed U/s 271(1)(c) is illegal and bad in law.

4. The appropriate cost be awarded to the assessee.”

2. It was argued by the ld AR of the assessee that there is a variation in the charge levied for imposition of penalty in the notice issued U/s 274 r.w.s. 271(1)(c) of the Act vis a vis charge levied in the penalty order passed U/s 271(1)(c) of the Act. Therefore, the penalty order is invalid in view of the various decisions noted in the written submissions so filed. Accordingly, it was prayed that because of variation in the charge, penalty so imposed is liable to be set aside in view of the decision of Hon'ble ITAT Amritsar bench in the case of HPCL Mittal Energy Ltd. Vs. ACIT in & 555/ Asr/2014 dated 03.05.2018. With regard to levy of charge at the stage of initiation of penalty by issue of notice U/s 274 vis a vis charge levied in the penalty order U/s 271(1)(c) of the Act, the precise observation of the Tribunal was as per para 15 which reads as under: “15. The moot question is that what should be the nature of specification of a charge by the AO at the stage of initiation of penalty proceedings and at the time of passing the penalty order. Is the AO required to specify in the penalty notice/order as to whether it is a case of 'concealment of particulars of income'; or 'furnishing of inaccurate particulars of income'; or both of them, which can be expressed by using the word 'and' between the two expressions. When the AO is satisfied that it is a clear-cut case of concealment of particulars of income, he must specify 3 ITA 549/JP/2019_ Roshan Lal Sancheti Vs ACIT it so in the notice at the time of initiation of penalty proceedings and also in the penalty order. The AO cannot initiate penalty on the charge of 'concealment of particulars of income', but ultimately find the assessee guilty in the penalty order of 'furnishing inaccurate particulars of income'. In the same manner, he cannot be uncertain in the penalty order as to concealment or furnishing of inaccurate particulars of income by using slash between the two expressions. When the AO is satisfied that it is a clear-cut case of 'furnishing of inaccurate particulars of income', he must again specify it so in the notice at the time of initiation of penalty proceedings and also in the penalty order. After initiating penalty on the charge of 'furnishing of inaccurate particulars of income', he cannot impose penalty by finding the assessee guilty of concealment of particulars of income'. Again, he cannot be uncertain in the penalty order as to concealment or furnishing of inaccurate particulars of income by using slash between the two expressions. When the AO is satisfied that it is a clear-cut case of imposition of penalty u/s 271(1)(c) of the Act on two or more additions/disallowances, one or more falling under the expression 'concealment of particulars of income' and the other under the 'furnishing of inaccurate particulars of income', he must specify it so by using the word 'and' between the two expressions in the notice at the time of initiation of penalty proceedings. If he remains convinced in the penalty proceedings that the penalty was rightly initiated on such counts and imposes penalty accordingly, he must specifically find the assessee guilty of 'concealment of particulars of income' and also 'furnishing of inaccurate particulars of income' in the penalty order. If the charge is not levied in the above manner in all the three clear-cut situations discussed above in the penalty notice and also in the penalty order, the penalty order becomes unsustainable in law.”

4 ITA 549/JP/2019_ Roshan Lal Sancheti Vs ACIT 3. On the other hand, the ld DR has relied on the orders of the authorities below and contended that the A.O. has correctly levied penalty on account of addition so made in the quantum order and which was confirmed by the appellate authorities.

before us with regard to defect in notice so as to invalidate the entire penalty order by having a variation in the charge levied for penalty in the 5. ITA 549/JP/2019_ Roshan Lal Sancheti Vs ACIT show cause notice U/s 274 of the Act vis a vis charge levied in the penalty order so passed U/s 271(1)(c) of the Act was not before the ld. CIT(A). Therefore, in the fitness of things and in the substantial interest of justice, we set aside the ex parte order of the ld. CIT(A) and the matter is restored back to the file of ld. CIT(A) for deciding afresh on merit after considering the issue raised with regard to defective notice. We direct accordingly.

Sd/- Sd/- ¼fot; iky jko½ ¼jes'k lh 'kekZ½ (VIJAY PAL RAO) (RAMESH C SHARMA) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 04th July, 2019 *Ranjan आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू vihykFkhZ@The Appellant- Shri Roshan Lal Sancheti, Bhilwara. 1. izR;FkhZ@ The Respondent- The A.C.I.T., Central Circle, Ajmer. 2. vk;dj vk;qDr@ CIT 3. vk;dj vk;qDr¼vihy½@The CIT(A) 4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत 5. xkMZ QkbZy@ Guard File (ITA No. 549/JP/2019) 6. vkns'kkuqlkj@ By order,

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