K.VIJAY,ERODE vs. ITO, ERODE

1. This appeal is filed by the assessee, aggrieved by the order of the Learned Commissioner of Income Tax(A)-3, Chennai dated27.11.2015 pertaining to assessment year 2009-10.

The assessee raised the following grounds for adjudication.

The order of the Commissioner of Income Tax (Appeals)-3,Coimbatore dated 27-1 1-20 15 in I.T.A.No 169/14- 15(A)-i for the above assessment year is contrary to law, facts and in the circumstances of the case.

The facts of the case are that a Survey u/s 133A of the Income Tax Act was conducted in the business premises of Shri T P Kathirvel & group of cases on 21/12/2009 and the assessee is one of the group cases. The Assessing Officer in his penalty order stated that Shri Kathirvel and his two sons, Shri K. Vijay and Shri K Gokul also filed an affidavit dated 4.12.2009 jointly solemnly affirming and stating that based on the documents found during the course of survey on 02.12.2009 they disclosed a total sum of `2,84,22,370/- for assessment year 2009-10 and `1,90,97,255 for the assessment year 2010-11. Subsequently the assessee filed the return of income for the assessment year 2009-10 on 30/312010 declaring an income of `1,65,110/- and did not admit the undisclosed income of `43,29,009/- as offered during the course of survey. The assessment in this case was completed u/s 143(3) on 29/12/2011 on a total income of `44,94,119/-. The Assessing Officer in his penalty order further stated that when penalty proceedings were initiated the assessee required to keep the proceedings in abeyance since he has filed the appeal before Commissioner of Income Tax (Appeals). It was stated in the penalty order that the appeal filed by the assessee was dismissed both by Commissioner of Income Tax (Appeals) and Income Tax Appellate Tribunal vide orders dated 9/11/2012 and 26/9/2013 respectively. Therefore, the assessing Officer held that the assessee has consciously and deliberately concealed the true particulars of his income and he imposed a penalty of `20,00,400/- u/s 271 (1) (c) of the Income Tax Act 1961. The assessee carried the appeal before the Ld.CIT(A) . On appeal, Ld.CIT(A) observed that the penalty levied u/s.271(1)(c) of the Act amounting to 20,00,400/- by the AO holding that the assessee has concealed the true particulars of his income, is sustainable and need not be interfered with. Against the order of Ld.CIT(A), now the assessee is in appeal before us.

At the outset, ld.A.R submitted that a copy of notice u/s.271 read with section 274 of the Income Tax Act reads as follows:-

On the other hand, ld.D.R submitted that the error could be rectified, if the issue may be remitted to the file of ld. Assessing Officer for fresh consideration.

I have heard both the parties and perused the material on record. As rightly pointed out by the ld.A.R, u/s.274 of the Act, the AO should satisfy the said grounds mentioned in sec.271(1)(c) of the Act whether it is for concealment of income or for furnishing of inaccurate particulars of income. Sending the printed form without striking down the irrelevant columns therein, could not satisfy the requirement of the law. In the present case, as seen from the copy of notice reproduced in earlier para of the order to show that the AO failed to strike up the irrelevant portion therein, which is not applicable to the assessee. In view of this, by placing reliance on the judgment of Supreme Court in the case of CIT Vs. M/s.SSA’s Emerald Meadows cited supra, I am inclined to delete that penalty order passed consequent to defective notice issued u/s.274 of the Act is bad in law. Accordingly, the penalty order is quashed.

In the result, the appeal of assessee is allowed. Order pronounced on 07th November, 2017. Sd/-