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Income Tax Appellate Tribunal, “B”
Before: SHRI S.S.GODARA & DR. DIPAK P. RIPOTE
ORDER
PER DR. DIPAK P. RIPOTE, AM:
This appeal filed by the Assessee is directed against the order of ld.Commissioner of Income Tax(Appeals)-8, Pune which is against an order under section 271(1)(c) of the Act, 1961, for the A.Y. 2012-13. The assessee has raised the following grounds of appeal: “1. Learned CIT(A)-8, Pune erred in law and on facts in confirming and the learned DCIT, Circle-6, Pune erred in law and on facts in levying penalty of Rs.30,37,680/- for concealment for particulars of income u/s 271 (1 )(c) of the ITA, 1961 without appreciating peculiar facts of the case.
2. Learned I-T authorities erred in law and on facts in not appreciating that specific charge, as to concealment of particulars of income (i.e. limb-1) or furnishing of inaccurate particulars of income (i.e. limb-2) was not made out in the notice u/s 274 of the ITA, 1961. The I-T authorities ought to have appreciated that, non-
A.Y. 2012-13 M/s.Shree Hatkeshwara Translines Pvt. Ltd., Vs. DCIT [A] mentioning of specific limb in the notice u/s 274 leads to a procedural irregularity in the penalty proceedings.
3. Learned I-T authorities erred in law and on facts in confirming / sustaining levy of penalty without appreciating that, appellant had revised the return of income within permitted time u/s 139(5) of the ITA, 1961; and that, the said revised return of income was duly accepted by the I-T authorities. Learned I-T authorities ought to have appreciated that once the revised return of income is accepted, penalty ought not to be levied on the basis of original return of income.
4. Learned CIT(A) and learned AO erred in law and on facts in not appreciating that, appellant has not concealed particulars of income, as so envisaged u/s 271(l)(c) of the ITA, 1961; considering absence of any economic enrichment of the appellant in the entire process.
5. Learned CIT(A) and learned AO erred in law and on facts in not appreciating that, appellant was involved in the irregular modus operandi on the belief of trade practice, etc. Learned I-T authorities ought to have appreciated the bonafide explanation given during assessment and appellate stage.
6. Learned CIT(A) and learned AO erred in law and on facts in not appreciating that, appellant declared more income against actual findings during the survey process to have peace of mind and to comply with the law.
7. Appellant craves leave to add / modify / delete / withdraw all / any of the Grounds of Appeal
.”
2. The Appellant herein craves leave to raise the following additional ground: “Learned CIT(A) erred in not appreciating that the order of penalty u/s 271(l)(c) of the Act is bad in law and void ab initio, as the notice issued u/s 271(l)(c) r. w.s. 274 does not satisfy the requirement of the law and suffers from a jurisdictional defect. The notice u/s 271(1) r.w.s 274 of the ITA, 1961 is devoid of a specific charge, i.e., whether it is for concealment of particulars of income (i.e. limb-1) or furnishing of inaccurate particulars of income (i.e. limb-2); and evinces an ambivalence on the part of the Assessing Officer in initiating penalty proceedings in the absence of a clear finding as to the specific charge under which the notice u/s 271(1) (c) r.w.s 274 was issued. Consequentially, the penalty order stands vitiated on account of lack of jurisdiction. ”
A.Y. 2012-13 M/s.Shree Hatkeshwara Translines Pvt. Ltd., Vs. DCIT [A]
Brief facts of the case are that the assessee is engaged in the business of commercial goods transport services. The return of income was filed by the assessee on 23.09.2012, declaring total loss of Rs.45,10,174/-. A survey action was conducted at the premises of assessee’s sister concern on 05.10.2012, subsequently, the assessee declared additional income of Rs.98,05,656/- for the A.Y.2010-11, 2011-12 and 2012-13 and the same was included in the revised Return of Income filed on 20.01.2013. Since the additional income was declared due to survey action, therefore, the Assessing Officer(AO) levied penalty under section 271(1)(c) of the Act.
Aggrieved by the order of the AO, the Assessee filed an appeal against the ld.CIT(A). The ld.CIT(A) confirmed the order passed by the AO.
Aggrieved by the Penalty Order the Appellant assessee filed appeal before this Tribunal.
The ld.Authorised Representative(ld.AR) for the assessee raised an additional ground that penalty notice is invalid as the Assessing Officer(AO) has not recorded satisfaction in the assessment order, the AO has not struck down the relevant portion of the notice under section 271(1)(c) of the Act. The ld.AR submitted
A.Y. 2012-13 M/s.Shree Hatkeshwara Translines Pvt. Ltd., Vs. DCIT [A] copy of the notice dated 27.03.2015 issued under section 274 r.w.s 271(1)(c) of the Act.
Heard both the parties. Perused the records. A perusal of the Assessing Officer’s corresponding show-cause notice dated 27.03.2015 issued to the assessee nowhere specified as to whether it had concealed the particulars of income or furnished inaccurate particulars of such income. This clinching fact has gone unrebutted from the Revenue’s side.
Faced with the situation, we quote Hon’ble Jurisdictional High Court’s recent Full Bench decision in Mohd. Farhan A Shaikh Vs. ACIT [2021] 434 ITR 1 (Bom) that such a failure in Assessing Officer’s part in not specifying the corresponding limb in the penalty show cause notice itself is very much fatal to the entire process and not sustainable in law. We adopt the very reasoning herein as well to delete the impugned penalty for this precise reason alone.
Respectfully following the proposition of law laid down by the Hon’ble Bombay High Court(supra), we are of the opinion that failure on Assessing Officer’s part in not specifying the corresponding limb in the penalty show cause notice itself is very much fatal to the entire process and not sustainable in law.
A.Y. 2012-13 M/s.Shree Hatkeshwara Translines Pvt. Ltd., Vs. DCIT [A] Therefore, we direct the AO to delete the penalty, accordingly, grounds of appeal raised by the assessee are allowed.
In the result, appeal of the assessee is allowed. Order pronounced in the open Court on 18th July, 2022.