"Penalty proceedings by issuing the notice u/s 274 (of Income Tax Act, 1961)/271(1)(c) without specifying whether the assessee has concealed ''particulars of income"" or assessee has furnished ""inaccurate particulars of income"", is bad in law."

1. All the above appeals preferred by the Assessees against the separate orders passed by the Ld. CIT(A) as per the details given below.

Sr. No.

Appeal Number & Asst. Year Date of CIT/ CIT(A) order Office of CIT/ CIT(A)

Penalty imposed

1. ITA No.490/Asr/2019 (A.Y.2008-09) 14/06/2019 CIT(A)-5, Ludhiana 1,44,632/-

2. ITA No.491/Asr/2019 (A.Y.2011-12) 14/06/2019 -Do- 7,78,020/-

4. ITA No.520/Asr/2017 (A.Y.2009-10) 23-06-2017 CIT-2, Jal. 14,89,341/-

3. ITA No.505/Asr/2017 (A.Y.1993-94) 22/05/2017 CIT-2, Jal. 73,030/-

2. The assessees have challenged the affirmation of penalty levied by the Assessing Officer in the instant cases. As the issue involved in all these appeals under consideration is identical, therefore, for the sake of brevity, have been taken simultaneously for adjudication by this composite order. For brevity the facts of ITA No.490/Asr/2019 shall be quoted as a lead case and result of the same shall be applicable mutatis mutandis to all appeals under consideration.

3. In the instant case, the assessee had filed his original return of income on 22.07.2008 at a total income of Rs.2,23,600/-. Subsequently, a search operation u/s 132(1) (of Income Tax Act, 1961) was held at the premises of the assessee on 05.12.2012 and thereafter, various statutory notices have been issued to the assessee. In response to the notices, the assessee had filed his return of income on 27.10.2015 by declaring total income of Rs.2,23,600/-. Thereafter, the assessee had filed another revised return on dated 12.03.2015 by declaring an income of Rs.6,35,280/- on account of long term capital gain. The Assessing Officer observed in the assessment order that the penalty proceedings u/s 271(1)(c) (of Income Tax Act, 1961) are being initiated separately for furnishing inaccurate particulars of income qua addition of Rs.2,90,568/- and for concealment of income qua amount of Rs.4,11,680/-. Subsequently the Assessing Officer issued the notice u/s 274 (of Income Tax Act, 1961) r.w.s 271 (of Income Tax Act, 1961) on 27.03.2015 which is reproduced herein below for the sake of brevity.

NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 .

PAN: AISPG 9530B

Office of the Deputy Commissioner of Income-tax, Central Circle-II, Jalandhar.

Whereas in the course of proceedings before me for the assessment year- 2008-09 it appears to me that you:-

• Have without reasonable cause failed to furnish me return of income which you were required to furnish by a notice given under section 22(1) (of Income Tax Act, 1961)/22(2)/34 of the Income-tax Act, 1922 or which you were required to furnish under section 139(1) (of Income Tax Act, 1961)/148 of the Income-tax Act, 1961, No...dated ..or have without reasonable cause failed to furnish it within the time allowed and the manner required by the said section 139(1) (of Income Tax Act, 1961) or by such notice.

• Have without reasonable cause failed to comply with a notice under section 22(4) (of Income Tax Act, 1961)/23(2) of the Indian Income-tax Act, 1922 or under section 142(1) (of Income Tax Act, 1961)/143(2) of the Income-tax Act 1961.

No. .dated ..

• Have furnished inaccurate /concealed particulars of Income, as discussed in the assessment order.

• You are hereby requested to appear before me at 11.00 A.M./P.M. on 27.04.2015 and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) (of Income Tax Act, 1961) of the of the Income-tax act, 1961. If you do not wish avail yourself of this opportunity of being heard in person or through authorized representative you may-show cause in writing on or before the said date which will be considered any such order is made under section 271(1)(c) (of Income Tax Act, 1961).

Sd/-

(Aditya Shukla)

Deputy Commissioner of Income-tax,

Central Circle-II, Jalandha

4. Ultimately the Assessing Officer levied the penalty u/s 271(1)(c) (of Income Tax Act, 1961) for furnishing inaccurate particulars of income on the amount of capital gain voluntarily offered at Rs.4,11,680/- in revised the return by the assessee.

5. The assessee challenged the imposition of penalty before the Ld. CIT(A) on the aforesaid grounds.

1. That the order passed by the Ld. Assessing Officer dated 28.02.2019 is against the law and facts of the case.

2. That having regard to the facts and circumstances of the case, Ld. AO has erred in law and on facts in passing the impugned assessment order u/s 271(1) (of Income Tax Act, 1961)( c) and without complying with the mandatory conditions u/s 271 (of Income Tax Act, 1961) as envisaged under the Income Tax Act, 1961.

3. That the Ld. Assessing Officer is erred in law in imposing penalty u/s 271(1)(c) (of Income Tax Act, 1961), ignoring the facts of case and without observing the principles of natural justice.

4. That assessee requested to add or amend any ground of appeal before the appeal is finally heard and disposed off.

6. The assessee also preferred to file written submissions while mentioning various judgments including the decision of the Hon'ble Karnataka Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 0565 (Kar.) and CIT vs. SSA's Emerald Medows, 380/15 [2016] 73 taxmann.com 241 (Kar.) and emphasized that notice issued u/s 274 (of Income Tax Act, 1961), by the Assessing Officer was a defective notice as the same did not specify any specific charge. The assessee further emphasized that in the instant case the penalty proceedings have been initiated for furnishing inaccurate particulars of income and concealment of income, whereas the penalty was levied finally for concealment of income only, therefore, the very basis of imposing penalty is vitiated and hence penalty proceedings are un-called for and needs to be quashed. The Ld. CIT(A) did not get impress by the submission of the assessee and declared the penalty notice by the Assessing Office and levying of penalty as valid as per law.

7. The assessee being aggrieved against the impugned order preferred the instant appeal and challenged the affirmation of penalty levied by the A.O. on legal ground as well as on merit. However, as the assessee before us emphasized on the legal issue only and cited various judgments in his favour including few mentioned below:-

Cases referred by Ld. AR

1. CIT vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 0565 (Kar.)

2. CIT vs. SSA's Emerald Medows, 380/15 [2016] 73 taxmann.com 241 (Kar.)

3. Sh. Santokh Singh vs. ITO, in Appeal No.498/ASR/2018 decided on 16.01.2019. Decided by ITAT Amritsar Bench, Camp at Jalandhar.

4. Sh. Puran Singh vs. Dy. CIT, Central Circle-1, and Jalandhar in Appeal No. 418/Asr/2018, decided on 15.01.2019.

8. On the other hand, the ld. DR vehemently opposed the contention of the assessee, qua initiation of penalty proceedings, issuance of notice u/s 274 (of Income Tax Act, 1961) and imposition of penalty ultimately. The Ld. DR submitted that as per language used in section 271 (of Income Tax Act, 1961) it appears that the AO assumes jurisdiction to initiate the penalty proceedings, the moment he is satisfied that the necessary conditions have been satisfied for initiation of penalty proceedings. Hence, the source of jurisdiction is satisfaction recorded in the assessment order and not in issuance of Sec.274 (of Income Tax Act, 1961). In this regard the Ld. CIT D R relied upon the judgment passed by the Hon'ble Apex Court in the case of CIT vs. S. V. Angidi Chettiar [1962] 44 ITR 739 (SC). The Ld. DR further argued that requirement of issuing of a notice u/s 274 (of Income Tax Act, 1961) is merely to give effect to the principles of natural justice and not a jurisdictional necessity. Further heading of Section 274 (of Income Tax Act, 1961) makes it clear that notice u/s 274 (of Income Tax Act, 1961) is just a process of jurisdictional procedure for adjudicating penalty proceedings and not a jurisdictional matter. The Ld. CIT DR also referred sections 464, 465 and 215 of the Criminal Procedure Code, 1973 and submitted that on the defective charges, no order or sentence or conviction can be altered or set aside unless the same has occasioned as failure of justice .

9. Having heard the parties at length and perused the material available on record. The issue involved in the instant case relates to the issuance of notice u/s 274 (of Income Tax Act, 1961) r.w.s 271(1) (of Income Tax Act, 1961) (c) of the Act as well as difference in recording of satisfaction/mentioning of reasons for initiation of penalty proceedings and imposition of penalty finally. There are four stages involved for dealing with the penalty proceedings.

(i) Satisfaction for initiation of penalty proceedings

(ii) Initiation of penalty proceedings

(iii) Providing opportunities of being heard to the assessee while Issuing notice u/s 274 (of Income Tax Act, 1961) r.w.s 271 (of Income Tax Act, 1961).

(iv) Final imposition of penalty.

In our considered view there can be satisfaction of the Assessing Officer for initiation of penalty proceedings but there is no certainty with regard to the initiation of penalty in each and every case. The Assessing Officer may record the satisfaction for initiation of penalty proceedings, however, it is not mandatory and must that after recording satisfaction for initiation of penalty proceedings, the initiation of penalty proceeding in all case must be acted upon. Even after initiation of penalty proceedings, the prerogative lies with the Assessing Officer as to whether he can drop the penalty proceedings at the initial stage itself without issuing the notice u/s 274 (of Income Tax Act, 1961) or to proceed further while doing so.

9.1 The Ld. DR has raised the issue that source of jurisdiction for imposition of penalty u/s 271(1)(c) (of Income Tax Act, 1961) is the satisfaction of the Assessing Officer or as the case may be during the course of assessment proceeding only but not in issuance of notice u/s 274 (of Income Tax Act, 1961). Further the Ld. DR also emphasized that the requirement of issue of notice u/s 274 (of Income Tax Act, 1961) is merely to give effect to the principle of natural justice but not a jurisdictional necessity, and any defect or irregularity in issuing the notice u/s 274 (of Income Tax Act, 1961) cannot make the proceedings void ab initio. Further distinction has to be made between a case of no notice and a case of improper notice. We are in agreement with the Ld. DR that the jurisdictional condition for imposition penalty starts from the satisfaction of the Assessing Officer/CIT during the course of assessment proceedings or otherwise, however, as the satisfaction itself is not sufficient until and unless in furtherance to the satisfaction, the initiation of the penalty proceedings have been made and statutory notice u/s 274 (of Income Tax Act, 1961) is being issued.

9.2 We are not influenced by the contention of the Ld. DR to the effect that the requirement of issuing notice u/s 274 (of Income Tax Act, 1961) is merely a formality to give effect to the principle of natural justice but not a jurisdictional necessity. In our considered view, Sec.274 (of Income Tax Act, 1961) prescribes that “ No order imposing a penalty under this Chapter SHALL be made unless the assessee has been heard, or has been given reasonable opportunities of being heard ” . The legislature has used the word ' shall ' therefore, it is a mandatory for the authorities to give a reasonable opportunity of being heard and for that opportunity, the charge(s) has to be clear, therefore, the issuance of notice u/s 274 (of Income Tax Act, 1961) requires to be given while specifying the charge(s) therein and the notice is instrumental and having main role for penalty proceedings for fair play and reasonable opportunities of being heard. Reasonable opportunity of being heard is based upon principle of natural justice which has wide implication and cannot be given strict interpretation. The principle of Audi Alteram Partem is the basic concept of the principle of natural justice and has not evolved from the constitution but evolved through civilization and mankind and is the concept of common law, which implies fairness, reasonableness, equality and equity. In India, the principles of natural justice are the grounds of Article 14 and 21 of the Constitution. Article 14 enshrines that every person should be treated equally. In the landmark case of ‘ Maneka Gandhi vs. The Union of India ' (1978 AIR 597) , it has been held by Constitution Bench of the Apex Court that the law and procedure must be of a fair, just and reasonable kind. The doctrine ensures a fair hearing.

9.3 The Ld. DR also raised the issue that a distinction has to be made between a case of no notice and a case of improper notice because in the former case the proceeding would be void and in a case of the latter, the proceedings would be merely irregular, and in case of such irregular proceedings, the test of prejudice has to be employed. In our view, issuance of notice with specific charge is must for the principles of Audi Alteram Partem, natural justice and fair play therefore improper notice also having no value in the eyes of law and cannot be regularized and having the same effect as of no notice. In "Dilip N. Shroff Vs. JCIT", 291 ITR 519 (SC), it has been held that section 271(1)(c) (of Income Tax Act, 1961) is in two parts. Whereas the first part refers to concealment of income, the second part refers to furnishing of inaccurate particulars thereof 'Concealment of income' and 'furnishing of inaccurate particulars' are different. In "Ashok Pai vs. CIT ", 292 ITR 11 (SC), the Hon'ble Supreme Court has held that concealment of income' and 'furnishing of inaccurate particulars' carry different connotations.

9.4 The Ld. DR further argued that violation of each and every procedural provision cannot automatically vitiate the proceedings or the order and the participation by the assessee during the course of proceedings, irregular if any can validate the proceedings. The Ld. DR also referred the judgments rendered by Patna High Court in the case CIT vs. Mithila Motors (Pvt.) Ltd. 149 ITR 75 (Pat.) and Madras High Court in the case of Sundaram Finance Ltd. vs. Asst CIT [2018] 93 Taxmann.com 250 (SC). The Ld. DR further argued that if the charge is discernible from the assessment order then it is immaterial whether the notice issued u/s 274 (of Income Tax Act, 1961) fails to mention the correct charge. The Ld. DR further argued that the minor defects in the notice need to be ignored u/s 292B (of Income Tax Act, 1961) as per the judgments delivered by Hon'ble Allahabad High Court in the case of Pr. CIT, Kanput vs. Sh. Sandeep Chandak [2018] 93 Taxmann.com 405 (All.) . We realize that High Court of Karnataka in the case of Manjunatha Cotton & Ginning Factory [2013] mandates for issuing the notice u/s 274 (of Income Tax Act, 1961) while specifying the ground(s)/charge(s) which the assessee has to meet specifically. Further held that otherwise principle of natural justice is offended, if show cause notice is vague and on the basis of such proceedings, no penalty can be levied on the assessee. In our considered view the issue raised by the Ld. DR that participation by the assesse during the course of proceedings, cures the irregularities and minor defects in the notice needs to be ignored u/s 292B (of Income Tax Act, 1961) is devoid of merits as the Hon'ble Karnataka High Court in the Manjunatha Cotton and Ginning Factory (supra) has clearly laid down the law that It is to be kept in mind that section 271(1)(c) (of Income Tax Act, 1961) is a penal provision, and such a provision, has to be strictly constructed . The Hon'ble Court further held that "Notice under section 274 (of Income Tax Act, 1961) should specifically state the grounds mentioned in section 271(1)(c) (of Income Tax Act, 1961), i.e, whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form, where all the grounds mentioned in section 271 (of Income Tax Act, 1961) are mentioned, would not satisfy requirement of law. 35. It leas further been held that the assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice are offended. On the basis of such proceedings, no penalty could be imposed on the assessee. Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. The dictum laid down in Manjunatha Cotton and Ginning Factory (supra) is not only approved by the same High Court in the case of SSA's Emerald Meadows { (2016) 73 taxmann.com 248} but also by the Apex Court in the case of Income Tax, Bangalore Versus M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC) wherein the Hon'ble Court dismissed the Special Leave Petition filed by the Revenue against the judgment passed in the case of M/s. SSA's Emerald Meadows (supra) , whereby identical issue was decided in favour of the assessee. Operative part of the decision made in the case of M/s. SSA's Emerald Meadows (supra), 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 of 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 (of Income Tax Act, 1961) r.w.s. 271(1)(c) (of Income Tax Act, 1961) is had in law and. invalid inspite the amendment of Section 271 (of Income Tax Act, 1961)(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 (of Income Tax Act, 1961) 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 (of Income Tax Act, 1961) read with Section 271(1)(c) (of Income Tax Act, 1961) 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 Income Tax Act, 1961):, 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 the decision 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."

9.5 Kerala High Court in " N.N. Subramania Iyer vs. UOI ", 97 ITR 228 (Ker) has held "The penalty notice, Exhibit P-2, is illegal on the face of it. It is in a printed form, which comprehends all possible grounds on which a penalty can be imposed under section 18(1) of the Wealth-tax Act. The notice has not struck off any one of those grounds, and there is no indication for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. Even in the counter-affidavit filed by the second respondent, he has not stated for what specific violation he issued it. It is not that it would have saved his action. Apparently, Exhibit P-2 is a whimsical notice issued to an assessee without intending anything."

9.6 Even the illegality in the Notice cannot be saved by recourse to section 292BB (of Income Tax Act, 1961), as held by the ITAT, Mumbai Bench in the case of "Sarita Milind Davare vs. ACIT", ITA No. 2187/Mum/2014, wherein it was held that section 292BB (of Income Tax Act, 1961) would not come to the rescue of the revenue when the notice was not in substance and in conformity with, or according to the intent of the Act.

9.7 The Ld. DR at last submitted that rules of procedure are the handmaid of justice to advance the cause of justice but not to obstruct it and Manjunatha Cotton case (supra) cannot be considered to be binding precedent. As it is trite that obiter dicta, per incuriam, sub silentio (when a particular point of law involved in the decision is not perceived by the Court or present to its mind that is without argument, without prejudice to the rule and without citation of any authority) are the exceptions to the doctrine of binding precedents. Per incuriam are those decisions given in ignorance for forgetfulness of some statutory provisions or some authority binding on the Court concerned. The ld. DR further argued that in the Manjunatha Cotton case (supra) the Hon'ble High Court have decided multiple appeals having different issues and have not laid down a specific law but written a sort of essay covering the provisions. Unfortunately, they have just given their opinion on various issues without referring to the other authorities on the same issues. The decision is kind of monologue which does not refer to the arguments raised by the Revenue or other parties. It also ignores the established principles laid down by the Hon'ble Apex Court with regard to the doctrine of prejudice. It also has not referred to the rules of an interpretation laid down by the Apex Court. Thus, the decision given is the sub silentio and is also per incuriam.

In our thoughtful consideration, we are not convinced by the contention of the Ld. DR as we realize that the Hon'ble High Court in Manjunatha Cotton case (supra) extensively dealt with various situations and parameters qua penalty proceedings and laid down the dictum, which was not only scrutinized and tested by various High Courts but also by the Apex Court in the M/s SSA,s Emerald Medows case (supra). Therefore it cannot be said that the decision is kind of monologue and against the established principles of law laid down by the Hon'ble Apex Court qua doctrine of prejudice. Even otherwise we do not have any jurisdiction to act against any judgment of the higher Courts and to declare any judgment as per in-curiam as desired by the Ld. CIT DR though written synopsis.

9.8 Though, we have gone through all the judgments referred by the Ld. CIT- DR and Ld. A. R. and found some of them distinguishable on facts and not applicable to the instant cases, however we have referred few relevant judgments only for the sake of brevity and just decision of this case.

9.9 No doubt there are judgments on both side qua validity of notice and its effects on the penalty proceedings, however, as per decision Hon'ble Apex Court in the case of CIT Vs. Vegetable Products 88 ITR 192 , wherein the Hon'ble Court laid down the proposition to the effects " whenever there are two reasonable constructions of a taxing provision are possible that construction which favours the assessee must be adopted". Hence considering the issue involved in the instant appeal is identical to the issue decided by the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory case (supra), M/s SSA's Emerald Medows (supra) and by the Apex Court in the case of M/s SSA's Emerald Medows (supra), we are of the considered opinion that once a notice u/s 274 (of Income Tax Act, 1961) is defective or not clarifying the charge/charges specifically then it shall vitiate the penalty proceedings and no penalty can sustain in that eventuality because even section 464 (of Income Tax Act, 1961), 465 (of Income Tax Act, 1961) and 215 (of Income Tax Act, 1961) the Criminal Procedure Code, 1973 mandates that " No finding sentence or order by a Court of competent jurisdiction shall be deemed invalid merely on the ground that no charge was framed or on the ground of any error, omission or irregularity in the charge including any misjoinder of charge, unless, in the opinion of the Court of appeal, confirmation or revision, a failure of justice has in fact been occasioned thereby . " It is the wisdom of the Court considering the facts of the case that if no valid charge has been framed against the accused in respect of the offences, it shall quash the conviction as per Criminal Law. In our view as per section 274 (of Income Tax Act, 1961) the reasonable opportunities of being heard is mandatory for imposing a penalty, therefore, the specific charge also necessitate and imperative for fastening the liability against the assessee because it also culminate into the criminal prosecution ultimately, therefore, having the nature of quasi- criminal. Section 215 (of Income Tax Act, 1961) of Cr. P.C. mandates no error in stating either the offence or the particulars required to be stated in the charge, and no omission to state the offence or those particulars, shall be regarded at any stage of the case as material, unless the accused was in fact misled by such error or omission, and it has occasioned a failure of justice .

When the notice has been issued without specifying any charge then certainly the doubt goes in the minds of the assessee as he cannot be sure to reply as to what charge he is being prosecuted or supposed to defend, hence in that eventuality, in our considered view the situation will amounts to misleading by such error or omission, and would occasioned a failure of justice.

9.10 In over facts and circumstances and analyzation, we are of the considered view that the penalty provisions of section 271(1)(c) (of Income Tax Act, 1961) 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 Income Tax Act, 1961) carry different meanings. Therefore, it is 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 Income Tax Act, 1961) 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 Income Tax Act, 1961) 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.

9.11 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 (of Income Tax Act, 1961) r.w.s. 271(1)(c) (of Income Tax Act, 1961) dated 27.03.2015 without striking off the irrelevant words, apparently goes to prove that the Assessing Officer initiated the penalty proceedings by issuing the notice u/s 274 (of Income Tax Act, 1961)/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 mind which is bad in law, hence can not be considered a valid notice sufficient to impose penalty u/s 271(1)(c) (of Income Tax Act, 1961). Even the A.O. while recording the satisfaction wherein has recoded the satisfaction on both of the limbs and issued the notice under section 274 (of Income Tax Act, 1961) without specifying the limb and finally imposed the penalty on one limb, which only goes to show the he was uncertain and confuse for initiating the penalty proceedings and issuing the notice and while levying of penalty, therefore in cumulative effects, we are of the view that under these circumstances, the penalty is not leviable as held by the various Courts including Apex Court and hence, we have no hesitation to delete the penalty levied by the AO and affirmed by the Ld. CIT(A). Consequently the order under challenge cannot sustain and liable to be set aside and hence the appeal filed by the Asseeee is allowed.

10. As we have decided the legal ground and deleted the penalty, therefore not adverting to the merits of the case, because the same shall become academic and futile exercise only.

11. In the result, all the appeals under consideration filed by the assessees stand allowed.

Order pronounced in the open Court on 18/02/2020.

Sd/- Sd/-

(DR. A.L.SAINI) (N.K.CHOUDHRY)

ACCOUNTANT MEMBER JUDICIAL MEMBER