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Briefly stated facts as culled out from the records are that the assessee is an individual earning income from plying of trucks and from other sources and filed his return of income for Assessment Year 2013-14 declaring income of Rs.1,99,310/- on 30.7.2013. The case was selected for scrutiny and notices were duly served.
Assessment was completed u/s 143(3) dated 25.01.2016 assessing income at Rs.39,50,140/- . Penalty proceedings u/s 271(1)(c) of the Act were initiated for concealment of income or furnishing of inaccurate income. Against the levy of penalty at Rs.7,41,629/- assessee filed an appeal before Ld. CIT(A) but could not succeed.
The assessee is now in appeal raising following grounds of appeal;
“1.(a) Penalty of Rs.7,41,629/- u/s 27l(1)(c) is unlawful and against the facts of the case:
On the facts and in the circumstances of the case. the Ld. Assessing Officer erred in levying penalty of Rs. 7,41.629/- u/s. 271(1)(c) of the Act, without looking at the facts of the case and against the law, &: the CIT (Appeals) erred in confirming the same, thus the penalty so imposed is illegal. unjustified and bad in law,. hence needs to be deleted. l.(b) No inaccurate particulars of income furnished bv the Assessee:
On the facts and in the circumstances of the case. the Ld. Assessing Officer erred in 2
At the outset Ld. Counsel for the assesse while taking up the legal ground about the validity of the notice issued u/s 274 r.w.s.
271(1)(c) of the Act pointing out mistake in the penalty notice submitted that the issue is squarely covered in favour of the assessee by the judgment of Hon'ble jurisdictional High Court in the case of Principal Commissioner of Income Tax v/s Kulwant Singh Bhatia dated 09.05.2018 (ITA 9 to 14 of 2018) wherein it was held that the penalty u/s 271(1)(c) of the Act is not sustainable in law as the notice was not specific. Hon'ble court observed as follows:-
“on due consideration of the arguments of the Learned counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that Learned Tribunal has rightly relying on the decision of CIT V/s Manjunatha Cotton Ginning Factory and CIT V/s SSA'S Emerald Meadows rightly allowed the appeal of the assessee and set aside the order of penalty imposed by the authorities. No substantial question of law is arising in these appeals. ITA. No(s) 9/2018, 10/2018, 11/2018, 12/2018, 13/2018 and 14/2018, filed by the appellant have no merit and are hereby dismissed."
Ld. Departmental Representative vehemently argued and supported the orders of lower authorities.
Gulshan Yadav You are hereby requested to appear before me at 12.00 PM on 23- February-2016 and show cause why an order imposing penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing or before the said date which will be considered before any such order is made under section 271. Yours faithfully, Sd/- (D.M. Panvalkar) Income Tax Officer 4(5), Indore 7. From perusal of the above show cause notice we find that the Ld.A.O has merely mentioned the section but the specific charge i.e. whether the penalty have been initiated for concealment of particulars of income or for furnishing inaccurate particulars of income has not been mentioned. Now whether such type of notice which does not speak about the specific charge leveled against the assessee is valid and tenable in the eyes of law needs to be examined in the light of judgment relied by Ld. Counsel for the assessee.
We find that similar issue came up before the jurisdictional High Court in the case of Shri Kulwant Singh Bhatia (supra) wherein the Hon'ble Court discussed the judgment of Hon'ble High Court in the case of CIT V/s Manjunatha Cotton Ginning Factory Gulshan Yadav
In the instant appeal also the Ld. A.O should be clear as to whether the alleged addition goes under the limb of “concealment of particulars of income” or “furnishing inaccurate particulars of income”. Merely issuing notice in general proforma will negate the very purpose of natural justice as held by the Hon'ble Apex Court in the case of Dilip N Shraf 161 Taxmann 218 that “the quasi- criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice.
We therefore respectfully following above referred judgments and in the given facts and circumstances of the case are of the considered view that the alleged notice issued u/s 274 r.w.s.
271(1)(c) of the Act is invalid, untenable and suffers from the infirmity of non application of mind by the Assessing Officer. We accordingly set aside the finding of Ld. CIT(A) and direct to delete the penalty of Rs.7,41,629/- levied u/s 271(1)(c) of the Act on this legal ground itself. We accordingly allow ground No.1(c) raised by the assessee on the legality of the penalty proceedings initiated u/s 271(1)(c) of the Act. Since the penalty u/s 271(1)(c) of the Act has been dealt on the preliminary points other arguments of the