IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "SMC", NEW DELHI
BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER
ITA No.3778/Del/2018
Assessment Year: 2008-09
Smt. Ritu Malik T-236, DB Vs ITO, Ward 62 (5)
Gupta Road, Phara Ganj, New New Delhi
Delhi 110055
PAN No. AALPM2130Q
(APPELLANT) (RESPONDENT)
Appellant by Sh. Ved Jain, Advocate
Respondent by Sh. S. L. Anuragi, Sr. DR
Date of hearing: 16/01/2019
Date of Pronouncement: 16/01/2019
ORDER
PER N. S. SAINI AM:
1. This is an appeal filed by the assessee against the order of the CIT(A)-
20 dated 16.03.2018 for the A. Y. 2008-09
2. The sole issue involved in this appeal is that the Commissioner of
Income Tax (Appeals) erred in confirming the levy of penalty of Rs.676642/-
u/s 271 (1) (c) of the Act.
3. At the outset, ld Authorised Representative of the assessee filed before
us copy of notice issued u/s 271 (1) © of the Act dated 29.02.2016, copy of
which is placed on record and pointed out there from that in the said notice,
the Assessing Officer has stated as under :-
"Where in the course of proceedings before me for the assessment year
2008-09, it appears to me that you :-
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.......
have concealed the particulars of your income or ......... furnished
inaccurate particulars of such income."
4. He submitted that it is not clear from the said notice issued u/s 271
(1) (c) of the Act by the Assessing Officer whether the show cause is issued
to the assessee for concealment of particulars of income or for furnishing
inaccurate particulars of income.
5. He submitted that the issue stands covered by the decision of Delhi
Bench of the Tribunal in the case of Ashok Kumar Chauhan Prop M/s.
Gurucharan Jewellers Vs. ITO reported in 2018 (12) TMI 1386 ITAT Delhi
and therefore, following the same the levy of penalty should be deleted.
6. The Ld. DR on the other hand submitted that the Ld. CIT(A) at page
10 para 6.7 of his order has stated that in the photocopy of the penalty
notice submitted by the appellant the word concealed particulars has been
strike off.
7. The Ld. AR of the assessee filed xerox copy of the notice dated
29.02.2016 issued u/s 274 r/w section 271 of the Act 1961 together with
the original copy of the said notice and demonstrated that the observation of
the CIT(A) in his order the word concealed particulars has been strike off is
factually incorrect.
8. The Ld. DR could not controvert the above submissions of the AR of
the assessee by producing any evidence or material before me.
9. In the above background of the case I find that the Tribunal in the
case of Ashok Kumar Chauhan Prop M/s. Gurucharan Jewellers Vs. ITO
reported in 2018 (12) TMI 1386 ITAT Delhi has held as under :-
4. We have heard the rival submissions perused the
orders of lower authorities and materials available on record.
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We find that the facts in the present appeal are not in dispute
and the Assessing Officer in the order passed u/s.271(1)(c)
dated 26.07.2012 levied penalty of Rs.Rs.8,36,592/-.
5. Hon'ble Apex Court vide judgment in case of M/s.
SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC)
dismissed the Special Leave Petition filed by the Revenue
against the judgment rendered by Hon'ble High Court of
Karnataka whereby identical issue was decided in favour of
the assessee. Operative part of the judgment in case of M/s.
SSA's Emerald Meadows (supra) decided by Hon'ble High Court
of Karnataka is reproduced below
"2. This appeal has been filed raising the following substantial
questions of law:
(1) Whether, omission if assessing officer to explicitly mention
that penalty proceedings are being initiated for furnishing oj
inaccurate particulars or that for concealment of income makes
the penalty order liable for cancellation even when it has been
proved beyond reasonable doubt that the assessee had
concealed income in the facts and circumstances of the case?
(2 Whether, on the facts and in the circumstances of the case,
the Tribunal was justified in law in. holding that the penalty
notice under Section 274 r.w.s. 271(1)(c) is had in law and.
invalid inspite the amendment of Section 271(1 B) with
retrospective effect and by virtue of the amendment, the
assessing officer has initiated the penalty by properly recording
the satisfaction for the same?
(3) Whether on the facts and in the circumstances of the case,
the Tribunal was justified in deciding the appeals against the
Revenue on the basis of notice issued, under Section 274
without taking into consideration the assessment order when
the assessing officer has specified that the assessee has
concealed particulars of income?
3. The Tribunal has allowed the appeal filed by the
assessee holding the notice issued by the Assessing Officer
under Section 274 read with Section 271(1)(c) of the Income Tax
Act, 1961 (for short 'the Act') to be bad in law as it did not
specify which limb of Section 271(1)(c) of the Act, the penalty
proceedings had been initiated i.e., whether for concealment of
particulars of income or furnishing of inaccurate particulars of
income. .The Tribunal, while allowing the appeal of the
assessee, has relied 01 the derision of the Division Bench of
this Court rendered In the case of COMMISSIONER or INCOME
TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY
(2013) 359 ITR 565.
4. In our view, since the matter is covered by judgment
of the Division Bench of this Court, we are of the opinion, no
substantial question of law arises in this appeal for
determination by this Court, the appeal is accordingly
dismissed. "
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6. Bare perusal of the notice issued u/s 271(1 )(c)
apparently goes to prove that the Assessing Officer initiated the
penalty proceedings by issuing the notice u/s 274/271 (1)(c) of
the Act without specifying whether the assessee has concealed
"particulars of income" or assessee has furnished "inaccurate
particulars of income", so as to provide adequate opportunity to
the assessee to explain the show cause notice. Rather notice in
this case has been issued in a stereotyped manner without
applying any mind which is bad in law, hence is not a valid
notice sufficient to impose penalty u/s 271(1)(c) of the Act.
7. The penalty provisions of section 271(1 )(c) of the Act
are attracted where the assessee has concealed the particulars
of income or furnished inaccurate particulars of such income. It
is also a well-accepted proposition that the aforesaid two limbs
of section 271(1)(c) of the Act carry different meanings.
Therefore, it was imperative for the Assessing Officer to strike-
off the irrelevant limb so as to make the assessee aware as to
what is the charge made against him so that he can respond
accordingly. The Hon'ble Karnataka High Court in the case of
Manjunatha Cotton & Ginning Factory, 359 ITR 565 (Kar)
observed that the levy of penalty has to be clear as to the limb
under which it is being levied. As per Hon'ble High Court,
where the Assessing Officer proposed to invoke first limb being
concealment, then the notice has to be appropriately marked.
The Hon'ble High Court held that the standard proforma of
notice under section 274 of the Act without striking of the
irrelevant clauses would lead to an inference of non-application
of mind by the Assessing Officer. The Hon'ble Supreme Court in
the case of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also
noticed that where the Assessing Officer issues notice under
section 274 of the Act in the standard proforma and the
inappropriate words are not deleted, the same would postulate
that the Assessing Officer was not sure as to whether he was
to proceed on the basis that the assessee had concealed the
particulars of his income or furnished inaccurate particulars of
income. According to the Hon'ble Supreme Court, in such a
situation, levy of penalty suffers from non application of mind.
In the background of the aforesaid legal position and, having
regard to the manner in which the Assessing Officer has issued
notice under section 274 r.w.s. 271(1)(c) of the Act dated
15.1.2014 without striking off the irrelevant words, the penalty
proceedings show a non-application of mind by the Assessing
Officer and is, thus, unsustainable.
8. The facts of the present appeal are identical to the
facts of the case before the Hon'ble Supreme Court in the case
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of SSA's. Emarld Meadows(supra) and, therefore, the decision
of Hon'ble Supreme Court squarely applies to the case of the
assessee. Hence, respectfully following the same, we cancel the
order of the Assessing Officer dated 26.07.2012 of
Rs.8,36,592/- and allow the ground of appeal of the assessee.
9. In the result, the appeal filed by the assessee is
allowed."
10. Facts being identical respectfully following precedent I delete the levy
of penalty u/s 271 (1) (c) of the Act of Rs.676646/- and allow the ground of
appeal of the assessee.
11. In the result, the appeal of the assessee is allowed.
Order pronounced in the open court on 16.01.2019
Sd/-
(N. S. SAINI)
ACCOUNTANT MEMBER
Dated: 16.01.2019.
*Neha *
Copy of order to: -
1) The Appellant
2) The Respondent
3) The CIT
4) The CIT(A)
5) The DR, I.T.A.T., New Delhi
Assist ant Regi stra r
ITAT, New Delhi
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Date of dictation 16.01.2019
Date on which the typed draft is placed
before the dictating Member
Date on which the approved draft comes to
the Sr.PS/PS
Date on which the fair order is placed before
the Dictating Member for Pronouncement
Date on which the fair order comes back to
the Sr. PS/ PS
Date on which the final order is uploaded
on the website of ITAT
Date on which the file goes to the Bench
Clerk
Date on which file goes to the Head Clerk.
The date on which file goes to the Assistant
Registrar for signature on the order
Date of dispatch of the Order
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