SMT. SAROJ RAI,RANCHI vs. ACIT CIRCLE-2, RANCHI

IN THE INCOME TAX APPELLATE TRIBUNAL, RANCHI BENCH, RANCHI

BEFORE S/SHRI CHANDRA MOHAN GARG, JUDICIAL MEMBER AND LAXMI PRASAD SAHU, ACCOUNTANT MEMBER

ITA Nos.62, 63 & 64/Ran/2019 Assessment Years: 2010-2011 to 2012-13

Smt. Saroj Rai, Jagdish Enclave, Vs. DCIT, Circle-2, Ranchi Devi Mandap Road, Hehal, Ranchi. PAN/GIR No.AESPR 5328 E (Appellant) .. ( Respondent)

Assessee by : Shri Devesh Poddar,Adv Revenue by : Shri P.K.Mondal, Addl. CIT(DR)

Date of Hearing : 30/08/2019 Date of Pronouncement : 30/10/2019

O R D E R Per Bench These are appeals filed by the assessee against the separate orders

of the Commissioner of Income Tax(Appeals)-Ranchi dated 12.10.2018 for

the assessment year 2010-2011 to 2012-13.

Income Tax(Appeals) was not justified in confirming the levy of penalty of

Rs.1,22,670/-, Rs.44,220/- & 2,55,050/- imposed u/s.271(1)(c) of the Act

for the assessment years 2010-2011 to 2013-14.

271(1)(c) of the IT Act dated 31.3.2015. Referring to the same, he

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submitted that the Assessing Officer has not struck off the inappropriate

words from the said notices i.e., he has not specified under which limb of

the provisions i.e., whether for concealment of the particulars of income or

furnishing of inaccurate particulars of such income the penalty has been

levied. Referring to the decision of the Hon'ble Karnataka High Court in the

case of Manjunatha Cotton & Ginning Factory reported in 359 ITR 565

(Kar), he submitted that if the Assessing Officer does not strike off the

inappropriate words from the notices, then, levy of penalty u/s 271(1)(c) is

not justified since it is not known under which limb of the provision the

penalty has been levied. Further, the Assessing Officer in the assessment

order has not reached requisite satisfaction as to whether the initiation of

penalty is on account of concealment of income or furnishing of inaccurate

particulars of income. Hence, he urged that penalty levied by the Assessing

Officer deserves to be deleted.

authorities below.

perused the orders of the authorities below and penalty notices placed on

the record of the Tribunal. Perusal of the notices issued u/s 274 read with

section 271 of the IT Act dated 31.3.2015 show that the Assessing Officer

has not struck off the inappropriate words in the said notices. While

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imposing the penalty, the Assessing Officer did not mention under which

limb of the provision the penalty has been initiated i.e., for concealment of

income or for furnishing of inaccurate particulars of income or for both. The

penalty notices mention as under:-

“ Have concealed the particulars of your income or furnished ………..inaccurate particulars of such income.”

though penalty was initiated for 'furnishing inaccurate particulars of

income', the Assessing Officer invoked the other limb of section 271(1)(c) of

the Act while levying penalty i.e. 'concealment of income'. The manner in

which penalty has been levied by the Assessing Officer u/s.271(1)(c) of the

Act clearly shows that there was ambiguity in the mind of Assessing Officer

with regard to charge u/s.271(1)(c) of the Act that is to be invoked for levy

of penalty. It is a well settled law that penalty cannot be levied on the

charge other than the charge for which it was initiated.

The Hon'ble Karnataka High Court in the case of Manjunatha Cotton 7.

& Ginning Factory (supra) observed that the levy of penalty has to be clear

as to the limb under which it is being levied. As per Hon'ble High Court,

where the Assessing Officer proposed to invoke first limb being

concealment, then the notice has to be appropriately marked. The Hon'ble

High Court held that the standard proforma of notice under section 274 of

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the Act without striking of the irrelevant clauses would lead to an inference

of non-application of mind by the Assessing Officer.

We find that Hon’ble Supreme Court in the case of SSA’s Emarld 8.

Meadows (supra) has held that Omission by the AO to explicitly specify in

the penalty notice as to whether penalty proceedings are being initiated for

furnishing of inaccurate particulars or for concealment of income makes the

penalty order liable for cancellation.

to the manner in which the Assessing Officer has issued notices under

section 274 r.w.s. 271(1)(c) of the Act dated 31.3.2015 for assessment

years 2010-2011 to 2013-13 without mentioning that whether the assessee

had concealed the particulars of his income or furnished inaccurate

particulars of income, we are of the considered view that when the

assessee has not been specifically made aware of the charges leveled

against him as to whether there is a concealment of income or furnishing of

inaccurate particulars of income on his part, the penalty u/s 271(1)(c) of the

Act is not sustainable. In view of above, we hold that the proceedings

show a non-application of mind by the Assessing Officer and is, thus,

unsustainable. Therefore, we delete the penalty of Rs.1,22,670/-,

Rs.44,220/- & 2,55,050/- imposed u/s.271(1)(c) of the Act for the

assessment years 2010-2011 to 2013-14, respectively.

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Order pronounced in the open court under Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 on 30 / 10/2019. Sd/- sd/- (Laxmi Prasad Sahu) (Chandra Mohan Garg) ACCOUNTANT MEMBER JUDICIALMEMBER

Ranchi; Dated 30 /10/2019 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant : Smt. Saroj Rai, Jagdish Enclave, Devi Mandap Road, Hehal, Ranchi.

Sr. Pvt. Secretary, ITAT, Cuttack

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