M/S K.P.SINGH BHADORIA CONTRACTOR,GWALIOR vs. DEPUTY COMMISSIONER OF INCOME TAX, JAIPUR

आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES, JAIPUR Jh fot; iky jko] U;kf;d lnL; ,oa Jh foØe flag ;kno] ys[kk lnL; ds le{k BEFORE: SHRI VIJAY PAL RAO, JM & SHRI VIKRAM SINGH YADAV, AM vk;dj vihy la-@ITA. No. 312/JP/2018 fu/kZkj.k o"kZ@Assessment Years : 2011-12 cuke M/s K.P. Singh Bhadoria Contractor The DCIT, Vs. E-46-A, Balwant Nagar, Gandhi Road, Central Circle-3, Thatipur, Gwalior (M.P.) Jaipur. LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAFFK 6124 L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@ Assessee by : Shri P.C. Parwal (C.A.) jktLo dh vksj ls@ Revenue by : Shri J.C. Kulhari (DCIT) lquokbZ dh rkjh[k@ Date of Hearing : 09/07/2018 mn?kks"k.kk dh rkjh[k@Date of Pronouncement :07/08/2018 vkns'k@ ORDER

PER: VIKRAM SINGH YADAV, A.M. This is an appeal filed by the assessee against the order of ld. CIT(A), Jaipur dated 29.01.2018 for the Assessment Year 2011-12 wherein the assessee has challenged the confirmation the levy of penalty amounting to Rs. 2,04,970/- U/s 271(1)(c) of the Act.

ITA No. 312/JP/2018 2 M/s K.P. Singh Bhadoria Contractor vs. DCIT

been declared by the assessee in his return of income. Separately penalty proceedings U/s 271(1)(c) of the Act were initiated for concealment of income /furnishing of inaccurate particulars of income. In the notice issued U/s 274 r.w.s 271(1)(c) dated 22.03.2016, the notice was issued for concealing particulars of income or furnishing inaccurate particulars of income. Thereafter, the AO passed the penalty order dated 21.09.2016 wherein the penalty amounting to Rs. 2,04,970/- was levied for concealing the particulars of income to the extent of Rs. 6,63,336/-, the same has been confirmed by the ld. CIT(A) and the assessee’s is now in appeal before us.

ITA No. 312/JP/2018 3 M/s K.P. Singh Bhadoria Contractor vs. DCIT

“15. We have heard the rival contentions and perused the material available on record. Firstly, regarding the preliminary plea of the ld AR that in absence of a specific charge against the assessee in the penalty notice, consequent levy of penalty by the AO is illegal and bad in law, we refer to the penalty notice dated 18.03.2013 which talks about assessee concealing the particulars of income or furnishing inaccurate particulars of income. The notice doesn’t specify the exact charge against the assessee as to whether it relates to concealing the particulars of income or furnishing inaccurate particulars of income. The subsequent notice dated 17.08.2015 is against silent on the exact charge against the assessee. It is a settled position in law that the imposition of penalty under section 271(1)(c) is invited when the conditions specified therein are satisfied and further, the two expressions “concealing the particulars of income” and “furnishing inaccurate particulars of income” denote different connotations. It is therefore imperative that the assessee be made aware as to which of the two charges, he is required to submit his defence and supportive arguments. In the instant case, as we have noted above, the notice talks about both the charges and it doesn’t convey to the assessee as to which charge he has to respond. The notice thus demonstrate non- application of mind on the part of the AO. Further, we refer to the assessment order where, after discussing the issue relating to computation of capital gains, the AO held that by showing less capital gains, the assessee has furnished inaccurate particulars of income and penalty proceedings are being initiated separately and thereafter, towards the end of the assessment order, the AO states that penalty proceedings u/s 271(1)(c) read with section 274 have been initiated separately for concealment of income/furnishing of inaccurate particulars of income. This thus shows that the AO himself is unsure about the charge against the assessee during the course of assessment proceedings. Considering the observations of the AO in the assessment order alongside his action of non-striking off the irrelevant clause in the penalty notice shows that the charge being made against the assessee qua 271(1)(c) is not firm, shows non-application of mind on the part of

ITA No. 312/JP/2018 4 M/s K.P. Singh Bhadoria Contractor vs. DCIT

the AO, and the vagueness and ambiguity in the notice has thus prejudiced the right of reasonable opportunity to the assessee in as much as the assessee is not made aware as to which of the two charges, he has to submit his defence. 16. Here, we refer to the decision of Hon’ble Supreme Court in case of Dilip N Shroff reported in 161 Taxman 218 where it was held as under: “83. It is of some significance that in the standard proforma used by the Assessing Officer in issuing a notice despite the fact that the same postulates that inappropriate words and paragraphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non-application of mind. It was also bound to comply with the principles of natural justice. [See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718].”

ITA No. 312/JP/2018 5 M/s K.P. Singh Bhadoria Contractor vs. DCIT

circumstances of the present case and the above discussions, the penalty imposed under section 271(1)(c) is liable to be deleted.”

the case, in view of above discussions, we don’t think it would be

relevant to examine said contentions so raised by the ld AR and hence,

the same are not being dealt with.

In the result, the appeal filed by the assesse is allowed.

Order pronounced in the open Court on 07/08/2018.

Sd/- Sd/- ¼fot; iky jko½ ¼foØe flag ;kno½ (Vijay Pal Rao) (Vikram Singh Yadav) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 07/08/2018.

ITA No. 312/JP/2018 6 M/s K.P. Singh Bhadoria Contractor vs. DCIT *Santosh आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. vihykFkhZ@The Appellant- M/s K.P. Singh Bhadoria Contractor, Gwalior (M.P.) 2. izR;FkhZ@ The Respondent- DCIT, Central Circle-3, Jaipur. 3. vk;dj vk;qDr@ CIT 4. vk;dj vk;qDr@ CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत. 6. xkMZ QkbZy@ Guard File { ITA No. 312/JP/2018} vkns'kkuqlkj@ By order, सहायक पंजीकार@Aेेज. त्महपेजतंत