SAVITA SOMCHAND SHAH,THANE vs. ASST CIT CIR 1, KALYAN

आदेश / O R D E R Per Manoj Kumar Aggarwal (Accountant Member) 1. The captioned appeal by assessee for Assessment Year [AY] 2009-10 assails the order of Ld. Commissioner of Income tax (Appeals)-2 [CIT(A)], Thane dated 31/03/2016 qua confirmation of penalty u/s 271(1)(c) for Rs.2,94,617/-. 2. Briefly stated, the assessee, being resident individual, was subjected to an assessment u/s 143(3) vide Assessing Officer [AO] order dated 25/11/2011 wherein the total income of the assessee was determined at Rs.12,71,520/- after certain adjustments / disallowances as against returned income of Rs.3,68,830/- filed by assessee on 10/02/2010 which was later revised to Rs.11,46,280/- on 31/03/2010. Since, the original return was filed belatedly, the revised return was treated as non-est by the Ld. AO. The assessee suffered addition of Rs.9,02,693/- on account of sale of certain shares against which she was saddled with a penalty of Rs.2,94,617/- u/s 271(1)(c) vide AO penalty order dated 16/05/2012. The assessee contended that it already offered the income in the revised return and paid due taxes thereupon and hence not liable for penalty. However not convinced, AO levied the impugned penalty, which upon appeal, was confirmed by the Ld. CIT(A). Aggrieved, the assessee is in appeal before us. 3. The Ld. Counsel for assessee [AR] has assailed the penalty on legal grounds as well as on merits. It was contended that the assessee voluntarily offered the income in the revised return of income and paid due taxes thereupon and therefore, the penalty was unjustified. It was only because the return was treated as non-est in view of the statutory provisions, the assessee is saddled with the impugned penalty. Further Ld. AR while drawing our attention to the quantum Assessment order, show cause notice issued u/s 274 read with Section 271(1)(c) and AO’s penalty order and contended that the penalty order stood vitiated on technical grounds as the penalty was initiated / levied by AO without due application of mind. First of all, no specific charge was mentioned by AO in ITA No.4197/M/2016 Savita Somchand Shah Assessment Year 2009-10 the quantum order for which the penalty was being initiated. Further, the show-cause notice issued u/s 274 r.w.s. did not specify the exact ground / limb for which the assessee was being penalized which impinged upon a valuable right of the assessee to effectively contest the penalty proceedings. Finally the penalty was levied for concealment or filing of inaccurate particulars. Thus, the AO was never clear in his mind as to limb against which he initiated the penalty in the quantum order and therefore, the penalty order was bad in law in the light of various judicial pronouncements. Reliance has been placed on the judgment of Hon’ble Apex court in the case of CIT Vs SSA’s Emerald Meadows [72 taxmann.com 248] and Hon’ble Bombay High Court in CIT Vs. Samson Perinchery [98 CCH 0039 Mum HC]. Per contra, Ld. DR contended that the penalty was initiated with due application of mind. The notice u/s 274 was in the standard format and the limb for which the penalty was initiated was duly ticked by the AO and the assessee very well knew at all times for which the penalty was initiated and levied. The assessee actively contested the penalty and therefore, not entitled to raise this issue now.