SUKHPAL SINGH,GHAZIABAD UP vs. ITO WARD-2(3), GHAZIABAD

The present appeals have been filed by the assessee against the orders of the ld. CIT(A), Ghaziabad dated 27.03.2019 and 28.03.2019.

The relevant facts of the case are that the AO received information from the bank as part of Annual Information Return (AIR) that the assessee has deposited cash amounting to Rs.20,39,900/- in his savings bank account.

The cash deposits have been made on 28.05.2008 of Rs.19,90,000/- and Rs.49,900/- on 25.10.2008. & 4096/Del/2019 2 Sukhpal Singh 4. The assessee explained that the amounts have been received out of the sale proceeds of the land which has been sold as under: S.No. Date of Registry Sale Sold by Consideration 1 28.05.2008 Rs. 85,000/- Shri Vijay Singh 2 28.05.2008 Rs. 81,000/- Shri Vijay Singh 3 28.05.2008 Rs. 65,000/- Shri Vijay Singh 4 28.05.2008 Rs. 1,26,000/- Shri Vijay Singh 5 28.05.2008 Rs. 1,28,000/- Shri Vijay Singh 6 28.05.2008 Rs. 1,26,000/- Shri Vijay Singh 7 28.05.2008 Rs. 63,000/- Shri Vijay Singh 8 04.10.2008 Rs. 1,01,000/- Shri Brijeshwar and Shri Sukhpal 9 05.07.2008 Rs. 1,26,000/- Shri Brijeshwar and Shri Sukhpal 10 05.07.2008 Rs. 1,26,000/- Shri Brijeshwar and Shri Sukhpal 11 05.07.2008 Rs. 1,26,000/- Shri Brijeshwar and Shri Sukhpai 12 04.10.2008 Rs. 1,45,000/- Shri Brijeshwar and Shri Sukhpal 13 04.10.2008 Rs. 1,68,000/- Shri Brijeshwar and Shri Sukhpal 14 24.10.2008 Rs. 1,68,000/- Shri Brijeshwar and Shri Sukhpal 15 24.10.2008 Rs. 1,20,000/- Shri Brijeshwar and Shri Sukhpal Details of purchasers: S.No. Name of Seller Amount Date MT (Area) Purchaser Vijay Pal Singh 85000.00 28.05.2008 56.02 Smt. Ram Wati W/o 1 Ramji Lal Vijay Pal Singh 81000.00 28.05.2008 53.87 Smt. Maju Devi W/o 2 Vishnu Kumar 3 Vijay Pal Singh 65000.00 28.05.2008 43.10 Smt. Sangeeta W/o Pravender Kumar 4 Vijay Pal Singh 126000.00 28.05.2008 83.61 Smt. Sangeeta Dubey W/o Devi Prakash Dubey 5 Vijay Pal Singh 128000.00 28.05.2008 84.86 Chander Bhushan Mohan S/o Harbans lal Mohan Vijay Pal Singh 126000.00 28.05.2008 83.88 Smt. Rekha Sharma W/o Sh. Rajesh 6 Sharma 7 Vijay Pal Singh 63000.00 28.05.2008 41.80 Smt. Maya Devi W/o Sh. Tej Pal Singh 8 Brijeshwar & 101000.00 04.10.2008 50.16 Smt. Virwati W/o Sh. Sukh Pal Singh Kharan Singh 9 Brijeshwar & 126000.00 05.07.2008 83.88 Madan Singh S/o Beg Sukh Pal Singh Raj & 4096/Del/2019 3 Sukhpal Singh 10 Brijeshwar & 126000.00 05.07.2008 83.88 Smt. Meenakashi Devi Sukh Pal Singh W/o Yeatendra Pal Singh 11 Brijeshwar & 126000.00 05.07.2008 83.88 Smt. Raj Bala S/o Sukh Pal Singh Bhram Pal Singh 12 Brijeshwar & 145000.00 04.10.2008 72.30 Smt. Rekha Devi W/o Sukh Pal Singh Harsaran Tyagi 13 Brijeshwar & 168000.00 04.10.2008 83.61 Smt. Sangeet Tiwari Sukh Pal Singh W/o Sh. Ajay Kumar Tiwari 14 Brijeshwar & 120000.00 24.10.2008 59.92 Rishi Kumar S/o Sukh Pal Singh Ragubir prasad 15 Brijeshwar & 168000.00 24.10.2008 83.88 Smt. Savitri Devi W/o Sukh Pal Singh Deewan Singh Total 1754000.0 1048.65

The assessee explained that, the assessee along with his brothers sold the inherited family property and also explained that the cash received out of such sale transaction has been sent to Vijay Singh his brother who is at Pune by way of demand draft and the assessee has submitted the bank statement.

We find that the total amount of the cash received out of sale of land registered during the period from 28.05.2008 to 24.10.2008 was to the tune of Rs.17,54,000/- whereas the cash deposited on 28.05.2008 was to the tune of Rs.19,90,000/-. Hence, the explanation of the assessee cannot be considered as satisfactory. In the absence of any evidences brought before us, we hereby decline to interfere with the order of the ld. CIT (A). As a result, the appeal of the assessee is dismissed.

We have gone through the penalty order dated 01.05.2007 which is reproduced as under: & 4096/Del/2019 5 Sukhpal Singh 8. At the outset, the Ld. AR argued that the notice issued was bad in law and void ab initio as the notice prima facie did not satisfy the condition as to which limb of section 271(1)(c) the penalty has been levied either concealed income or furnished inaccurate particulars of income. It was argued that that it is elementary that for assuming valid jurisdiction to impose penalty, the assessing officer must, first be satisfied, though prima facie, that the assessee has either “concealed income” or furnished “inaccurate particulars of income” and on the basis of such satisfaction a show cause notice has to be issued under section 274 of the Act to the assessee specifying the addition/ disallowance in respect of which penalty is sought to be imposed and also the precise charge/ ground on which penalty is proposed to be imposed thereon. It was argued that notice issued under section 274 should specifically state the grounds mentioned in section 271(1)(c), i.e., whether it is for ‘concealment of income’ or for ‘furnishing of incorrect particulars of income’. Sending printed form, where both the grounds mentioned in section 271 of the Act are mentioned, does not satisfy requirement of law.

The ld. DR argued that the assessee was well aware of the reason of levy of penalty and has indeed replied to the show cause notice.

We have gone through the penalty notice issued by the Assessing Officer and find that the penalty notice does not specify whether the penalty was proposed for concealment of particulars of income or for furnishing inaccurate particulars of such income in terms of provisions of Section 271(1)(c). & 4096/Del/2019 6 Sukhpal Singh 11. The Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory: 359 ITR 565 held that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy requirement of law.

The jurisdictional Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. in of 2019, reiterated that notice under section 274 should specifically state the grounds on which penalty was sought to be imposed as the assessee should know the grounds which he has to meet specifically.

The aforesaid principle has been reiterated in the in the case of CIT vs. SSA'S Emerald Meadows 73 taxmann.com 241 (Kar) [Revenue’s SLP dismissed in 242 Taxman 180]

In the present case, too, in notice dated 01.05.2017 under section 274 read with section 271 of the Act, initiated penalty against the appellant for alleged ‘concealment of income or furnishing of inaccurate particulars of such income’, that is to say, the specific default was not specified by the assessing officer in the notice issued.

Hence, respectfully following the order of the Jurisdictional High Court, since the notice u/s 274 has not been specified as to whether penalty is proposed for alleged ‘concealment of & 4096/Del/2019 7 Sukhpal Singh income’ OR ‘furnishing of inaccurate particulars of such income’, the penalty levied is hereby obliterated.

As a result, the appeal of the assessee in is allowed. Order Pronounced in the Open Court on 12/03/2021.