ITXA-1742-11.doc S.S.Kilaje IN HIGH COURT OF JUDICATURE AT BOMBAY O.O.C.J. INCOME TAX APPEAL NO.1742 OF 2011 Shri. Omprakash T. Mehta 8-A Mehta Estate, Kurla, Andheri Road, Sakinaka, Mumbai - 400 072. PAN : AADPM0852H .. Appellant Versus Income Tax Officer 21 (3) (4) Room No.505, C-11, 5th Floor, Pratyaksha Kar Bhavan, Bandra Kurla Complex, Mumbai 400 051. .. Respondent Mr. Nishant Thakkar a/w. Ms. Jasmin Amalsadvala and Ms.Pooja K i/b. Nahush Shah Legal, Advocate for Appellant. Mr.A.R.Malhotra a/w. Mr. N.A. Kazi, Advocate for Respondent. CORAM : UJJAL BHUYAN & MILIND N. JADHAV, JJ. RESERVED ON : 05th March, 2020. PRONOUNCED ON : 17th August, 2020. JUDGMENT (PER MILIND N. JADHAV, J.) : 1. Heard Mr. Nishant Thakkar, learned counsel for appellant and Mr. A.R. Malhotra, learned standing counsel, Revenue for respondent. 2. This appeal has been preferred by appellant (also referred to as assessee) under provisions of Section 260-A of Income Tax Act, 1961 (briefly Act hereinafter) against order dated 31.05.2010 passed by Income Tax Appellate 1 of 24 ITXA-1742-11.doc Tribunal at Mumbai ( Tribunal for short) for Assessment Year 2005-06. 3. appeal has been preferred by assessee projecting following question as substantial question of law : Whether Tribunal was right in law in confirming levy of penalty under Section 271(1)(c) of Act ? 4. For appreciation of question proposed, it would be apposite to deal with relevant facts :- (i) Appellant is assessee under Act. Appellant alongwith 4 others executed agreement for sale dated 07.12.2004 in respect of plot of land at Vasai. total consideration stated in agreement was Rs.2,60,00,000.00 and conveyance was to be executed only upon receipt of entire consideration. appellant s share in sale consideration of said plot of land was 49.2%. During financial year under consideration, sum of Rs.1,05,01,111.00 was received out of total consideration of Rs.2,60,00,000.00. Hence during said financial year conveyance was not executed and possession was not handed over of said plot. (ii) In return of income filed by appellant for Assessment Year 2005-06, appellant offered to tax his share in consideration received during previous year i.e. Rs.51,66,548.00. 2 of 24 ITXA-1742-11.doc (iii) Respondent by notice dated 18.04.2007, called upon appellant to furnish details of capital gains earned during year under consideration i.e. Assessment Year 2005-06. Appellant furnished requisite information alongwith copy of sale agreement to respondent and after scrutinizing same respondent accepted capital gains arising on execution of sale agreement as offered by appellant. Accordingly, assessment order was passed. (iv) During Assessment Year 2006-07, further consideration of Rs.1,30,00,000.00 was received out of balance remaining total consideration. Appellant filed return of income for Assessment Year 2006-07 and offered to tax his share out of Rs.1,30,00,000.00 received during year, viz; Rs.63,96,000.00. (v) During financial year relevant to Assessment Year 2007-08 another installment of Rs.15,00,000.00 out of balance was received and appellant offered his share in said amount (i.e. Rs.7,38,000.00) to tax in return of income filed for Assessment Year 2007-08. (vi) final outstanding balance amount of consideration i.e. Rs.9,98,889.00 (Rs.2,60,00,000 Rs.2,50,01,111) was not 3 of 24 ITXA-1742-11.doc received and therefore conveyance was not executed between parties. However, during Assessment Year 2006-07 physical possession of said plot of land was forcibly taken over by purchaser. (vii) Respondent raised objection with manner in which capital gains arising from sale agreement with respect to said plot was offered to tax by appellant on receipt basis. After following procedure, respondent issued notice dated 21.04.2008 under provisions of Section 148 of Act seeking to reopen assessment for Assessment Year 2005- 06 under Section 147 of Act. (viii) Appellant by letter dated 02.06.2008 requested respondent to treat original return filed by appellant as return in compliance to notice under Section 148 of Act. By further letter dated 09.08.2008, appellant called upon respondent to furnish reasons for issuing statutory notice under Section 148 of Act. (ix) However, appellant revised his income tax returns for Assessment Years 2005-06 to 2007-08 withdrawing amount of capital gains and offering to tax capital gains on entire sale consideration of Rs.2,60,00,000.00 for financial year relevant to Assessment Year 2006-07. Thus, appellant 4 of 24 ITXA-1742-11.doc filed revised returns of income for Assessment Years 2005-06, 2006-07 and 2007-08 on above basis respectively. (x) Respondent by letter dated 03.11.2008 informed appellant that revised returns would not be accepted in view of appellant s letter dated 02.06.2008 by which appellant had requested respondent to consider original return as return in compliance to notice under Section 148 of Act. (xi) Appellant thereafter submitted revised working of capital gains for Assessment Years 2005-06 and 2006-07 and requested respondent to complete assessment for 3 years, viz; Assessment Years 2005-06, 2006-07 and 2007-08. (xii) Respondent completed reassessment for Assessment Year 2005-06 on 26.11.2008 and taxed appellant s share of capital gains arising on entire sale consideration of Rs.2,60,00,000.00 for said Assessment Year 2005-06. However, while completing above assessment respondent also initiated penalty proceedings against appellant for furnishing inaccurate particulars of income as result of deferring charge on capital gains arising pursuant to execution of sale agreement with respect to said plot of land. 5 of 24 ITXA-1742-11.doc (xiii) assessments for Assessment Years 2006-07 and 2007-08 were completed keeping in mind reassessment completed for Assessment Year 2005-06. (xiv) After completing above reassessment for Assessment Year 2005-06, respondent issued notice dated 26.11.2008 under Section 271(1)(c) of Act calling upon appellant to show cause as to why penalty should not be levied and called upon appellant to attend hearing for penalty proceedings by another notice dated 02.04.2009. (xv) By letter dated 13.04.2009, appellant furnished detailed reasons and circumstances under which revised returns of income for Assessment Years 2005-06 to 2007-08 came to be filed and also details of taxes alongwith amounts that were due as result of revised returns which had promptly been paid by appellant without raising any dispute. By another letter dated 13.04.2009 appellant also brought to notice of respondent that during course of original assessment proceedings for Assessment Year 2005-06, appellant had furnished copy of sale agreement and same had been enquired into by respondent viz-a-viz capital gains offered to tax by appellant. (xvi) By order dated 28.05.2009 respondent levied penalty on appellant for furnishing inaccurate particulars of income as 6 of 24 ITXA-1742-11.doc result of default committed by appellant in not offering capital gains arising out of entire sale consideration in financial year relevant to Assessment Year 2005-06. (xvii) Being aggrieved by above order passed by respondent levying penalty, appellant preferred statutory appeal before Commissioner of Income Tax (Appeals) (hereinafter referred to as CIT Appeals ). CIT Appeals by order dated 27.11.2009 confirmed levy of penalty by respondent. (xviii) Thereafter, appellant preferred further appeal before Tribunal. Tribunal by order dated 31.05.2010 dismissed appellant s appeal and confirmed order of CIT Appeals. (xix) Appellant filed application under Section 254 of Act seeking rectification of order dated 31.05.2010. Tribunal however, considered above application to be in nature of review petition and dismissed same by order dated 27.08.2010. (xx) Hence this appeal by assessee / appellant. 5. Mr. Nishant Thakkar, learned counsel appearing for appellant at outset has submitted brief chronology of dates and events and taken us through same, which is reproduced herein :- 7 of 24 ITXA-1742-11.doc Sr. Date Particulars Exh. Pg. Nos. No. 1 07-12-2004 Agreement to sell land in Vasai for Rs.2.6 19-27 crores- Appellant s share in land = 49.2%. Appellant receives only Rs.51.66 Lakhs during F.Y. 2004-05. 2 31-10-2005 Return for A.Y. 2005-06 offering B 28-30 Rs.51,66,548/- and claiming exemption u/s. 54EC of Act. 3 31-03-2005 Assessment Order for A.Y. 2005-06 accepting D 33-35 Assessee s claim 4 28-10-2006 Return for A.Y. 2006-07 filed offering E 36-42 Rs.63,96,000/- as capital gains on Vasai Land being amount received during year. 5 16-11-2007 Return for A.Y. 2007-08 filed offering F 43-45 Rs.7,38,000/- as capital gains on Vasai land being amount received during year. 6 21-04-2008 148 Notice issued by Respondents for A.Y. 2005-06 to bring to tax entire gains in A.Y. 2005-06 7 20-08-2008 Revised return filed for A.Y. 2006-07 I 50-56 withdrawing offer of capital gains in view of offer of entire gains to be made in A.Y. 2005- 06 revision not accepted in view of reopening of A.Y. 2005-06 8 21-08-2008 Revised return filed for A.Y. 2005-06 offering J 57-63 entire gains to tax not accepted since return was barred by limitation 9 22-08-2008 Revised return filed for A.Y. 2007-08 K 64-66 withdrawing offer of capital gains in view of offer of entire gains to be made in A.Y. 2005- 06 revision not accepted in view of reopening of A.Y. 2005-06. 10 22-08-2008 Letter to Respondent to consider revised L 67-68 return 11 03-11-2008 Reasons for Re-opening M 69-70 12 26-11-2008 Revised working of capital gains submitted N 71-74 (Investment in NABARD) A.Y.2005-06 13 20-10-2008 Revised working of capital gains submitted O 75-80 (Investment in NABARD) A.Y.2006-07 14 26-11-2008 Re-assessment Order Passed for A.Y. 2005-06 P 81-86 15 19-12-2008 Re-assessment Order Passed for A.Y. 2006-07 Q 87-89 16 26-11-2008 SCN as to why penalty should not be issued R 90 17 02-04-2009 Second Show Cause Notice S 92 18 13-04-2009 Assessee s Response to SCN T 93-94 19 24-04-2009 Second Letter by Assessee U 95-96 20 28-05-2009 Penalty Order for A.Y. 2005-06 V 97-99 21 13-06-2009 Form 35 a/w SOF AND GOA CIT Appeal Filed W 100-106 against Penalty Order 8 of 24 ITXA-1742-11.doc 22 27-11-2009 CIT (Appeals) Order X 107-111 23 04-01-2010 Form 36 GOA ITAT Appeal Filed Y 112-114 24 31-05-2010 ITAT Order Z 136-146 25 MA Filed challenging Tribunal s Order 26 27-08-2010 MA Order AA 147-159 5.1 From above chronology of events, Mr. Thakkar has submitted before us that there was complete disclosure made by appellant at all times and, therefore, it was not case of appellant furnishing inaccurate particulars of income or of concealing particulars of income. He submitted computation of income of all three years viz. Assessment Years 2005-06, 2006-07 and 2007-08 wherein it was specifically disclosed that consideration offered to tax was on receipt basis and most importantly during first Assessment Year i.e. 2005-06 scrutiny proceedings, appellant had furnished copy of agreement for sale which was considered and accepted by respondent. Appellant had filed income tax returns for respective Assessment Years i.e. 2005-06 (filed on 31.10.2005), Assessment Year 2006-07 (filed on 28.10.2006) and Assessment Year 2007-08 (filed on 01.11.2007), well before reassessment notice under Section 148 of Act came to be issued on 21.04.2008. Hence there was complete disclosure. He submitted that even though after receipt of reassessment notice if appellant had accepted assessibility of capital gains in Assessment Year 2005- 06, it did not imply or mean that appellant had furnished inaccurate particulars of income or appellant had concealed 9 of 24 ITXA-1742-11.doc particulars of income. copy of agreement for sale dated 07.12.2004 was disclosed by appellant at time of scrutiny at first instance i.e. in Assessment Year 2005-06. agreement was unregistered document on stamp paper worth Rs.100.00. As per Clause 8 of agreement, conveyance was required to be executed only upon receipt of entire consideration which had not been fulfilled. Under Clause 14 of agreement possession was required to be handed over only upon execution of conveyance. Again under Clause 12 of agreement, appellant had given permission to purchaser to fence property as mere licensee. On basis of aforesaid submissions he concluded that agreement to sale did not constitute sale under Section 2(47)(i) of Act and, therefore, land could not be deemed to be transferred under Act. While levying penalty, respondent was completely silent on aforesaid aspect and provisions of Section 2(47) of Act. Possession and license given to purchaser to enter upon property could not be deemed to be construed as part possession given under Section 53A of Transfer of Property Act, 1881. He submitted that neither in assessment order nor in penalty order, respondent dealt with case of appellant that since there was no transfer under Act and that appellant being under bonafide belief had therefore not offered entire gains in Assessment Year 2005-06. In assessment order for Assessment Year 2005-06, respondent 10 of 24 ITXA-1742-11.doc had accepted case of appellant on disclosure of agreement for sale. There was no loss incurred to revenue at any point of time or that appellant was guilty of suppression, concealment of particulars or furnishing inaccurate particulars of income as alleged by respondent. Section 271(1)(c) contemplates two separate offences viz. furnishing of inaccurate particulars of income and concealment of particulars of income. In present case, penalty proceedings were initiated against appellant for furnishing of inaccurate particulars of income. Further, relevant provisions of statutory notice issued under provisions of Section 274 of Act was blank i.e. not filled up or struck off. In present case, initiation of penalty proceedings was done for one offence i.e. (for furnishing inaccurate particulars of income) but levy of penalty was for another offence i.e. (concealment of income) which is not permissible in law. Keeping relevant portions of notice issued under Section 274 of Act blank led to jurisdictional defect and showed complete non-application of mind on part of respondent- Assessing Officer. Orders passed by ITAT and CIT Appeals upholding order levying penalty passed by respondent under provisions of Section 271(1)(c) of said Act therefore deserves to be quashed. 5.2. Mr. Thakkar laid emphasis and relied on following judgments in support of his submissions :- A. Agreement to sell does not constitute sale u/s. 2(47)(i) of 11 of 24 ITXA-1742-11.doc Income Tax Act, 1961 ( Act ) and therefore is not transfer u/s 2(47) of Act Alpati Venkataramiah v/s. CIT 57 ITR 185 (SC). B. Permission /license to enter is not possession under S. 53A of Transfer of Property Act and hence does not constitute transfer u/s 2(47)(v) of Act- Sheshasayee Steel P. Ltd. v/s. ACIT 421 ITR 46 (SC). C. Unregistered agreement to sell on Rs.100 stamp paper does not result in transfer u/s. 2(47)(v) of Act CIT v/s. Balbir Singh maini 398 ITR 531 (SC). D. Agreement specifically provides for conveyance and possession only on full payment, pending conveyance all permissions etc. in name of Vendors hence no de facto transfer for purposes of 2(47) (vi) of Act Sheshasayee Steel p. Ltd. Vs. ACIT 421 ITR 46(SC). E. When dispute between assessee and revenue is year of tax ability, penalty u/s 271(1)(c) should not be levied: (i) CIT Vs. Otis Elevator Co. Ltd. - ITXA No. 758 OF 2014 (ii) D M Dhanukar vs CIT 65 ITR 280 (Bom) (iii) CIT vs Sri Shraddha Textile Processors 286 ITR 499 (Mad) (iv) BTX Chemicals vs CIT 288 ITR 196 (Guj) (v) CIT vs Jagjit Engineering Works P.Ltd.-275 ITR 239(P&H) F. Initiation of penalty for one offence and levy for another offence is not permissible CIT vs Samson Perincherry [392 ITR 4] (Bom) G. This defect is compounded when notice u/s 274 is blank, as it shows complete non-application of mind jurisdictional 12 of 24 ITXA-1742-11.doc defect : i. PCIT Vs. Goa Coastal Resorts & Recreation Pvt. Ltd. - ITXA 24 of 2019 ii. Rishi R. Oswal Vs. CIT ITXA 1293 of 2015 iii. Ashish Estates & Properties P. Ltd. Vs. CIT 257 Taxman 585 (Bom) 6. Per contra, Shri A.R.Malhotra, learned standing counsel, Revenue appearing on behalf of respondent defended both orders passed by CIT Appeals and ITAT in upholding levy of penalty by respondent- Assessing Officer on appellant. He submitted that there was deliberate attempt on part of assessee to submit inaccurate particulars of income so as to reduce appellant s taxable income. He laid emphasis on explanation appended to Section 271(1)(c) and submitted that said explanation imposes element of strict liability on assessee for furnishing inaccurate particulars of income while filing return. Shri Malhotra referred to and relied upon following judgments in support of his submissions. Samson Maritime Ltd. Vs. Commissioner of Bombay High Court Income Tax City 7 B Dr. Amin s Pathology Laboratory (2001) 252 ITR 673 Vs. (Bombay) P.N.Prasad, Joint Commissioner of Income Tax C Union of India (2008) 174 Taxman 571 Vs. (SC) Dharamendra Textile Processors 7. submissions made by learned counsel for parties have been duly considered. Also perused materials on 13 of 24 ITXA-1742-11.doc record including judgments cited at bar. 8. Before we advert to submissions made, it would be apposite to state relevant legal provisions which are required to be considered in facts and circumstances of present case : Section 2(47) of Income Tax Act, 1961: 2. In this Act, unless context otherwise requires,- (47) transfer , in relation to capital asset, includes,- (v) any transaction involving allowing of possession of any immovable property to be taken or retained in part performance of contract of nature referred to in section 53A of Transfer of Property Act, 1882 1 (4 of 1882 ); or (vi) any transaction (whether by way of becoming member of, or acquiring shares in, co-operative society, company or other association of persons or by way of any agreement or any arrangement or in any other manner whatsoever) which has effect of transferring, or enabling enjoyment of, any immovable property. Explanation 1.- For purposes of sub- clauses (v) and (vi), "immovable property" shall have same meaning as in clause (d) of section 269UA;] Explanation 2. - For removal of doubts, it is hereby clarified that transfer includes and shall be deemed to have always included disposing of or parting with asset or any interest therein, or creating any interest in any asset in any manner whatsoever, directly or indirectly, absolutely or conditionally, voluntarily or involuntarily, by way of agreement (whether entered into in India or outside India) or otherwise, notwithstanding that such transfer of rights has been characterised as being effected or dependent upon or flowing from transfer of share or shares of company registered or incorporated outside India;) 14 of 24 ITXA-1742-11.doc "Section 53A of Transfer of Property Act, 1882: 53A. Part performance. Where any person contracts to transfer for consideration any immovable property by writing signed by him or on his behalf from which terms necessary to constitute transfer can be ascertained with reasonable certainty, and transferee has, in part performance of contract, taken possession of property or any part thereof, or transferee, being already in possession, continues in possession in part performance of contract and has done some act in furtherance of contract, and transferee has performed or is willing to perform his part of contract, then, notwithstanding that where there is instrument of transfer, that transfer has not been completed in manner prescribed therefor by law for time being in force, transferor or any person claiming under him shall be debarred from enforcing against transferee and persons claiming under him any right in respect of property of which transferee has taken or continued in possession, other than right expressly provided by terms of contract: Provided that nothing in this section shall affect rights of transferee for consideration who has no notice of contract or of part performance thereof. In order that provisions of Section 53A of T.P. Act be attracted, first and foremost, transferee must, in part performance of contract, have taken possession of property or any part thereof. Secondly, transferee must have performed or be willing to perform his part of agreement. It is only if these two important conditions, among others, are satisfied that provisions of Section 53A can be said to be attracted on facts of given case. Section 271(1)(c) is as under : "271(1) If Assessing Officer or Commissioner (Appeals) or Commissioner in course of any proceedings under this Act, is satisfied that any person- 15 of 24 ITXA-1742-11.doc (c) has concealed particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, - (i)...... (ii)...... (iii) in cases referred to in clause (c) or clause (d), in addition to tax, if any, payable by him, sum which shall not be less than, but which shall not exceed three times, amount of tax sought to be evaded by reason of concealment of particulars of his income or fringe benefits or furnishing of inaccurate particulars of such income or fringe benefits." 9. Since imposition of penalty is under Section 271 (1) (c) of Act, as per this provision, if Assessing Officer or Commissioner (Appeals) or Principal Commissioner or Commissioner in course of any proceedings under Act is satisfied that any person had concealed particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, in addition to tax payable by him, sum which shall not be less than but which shall not exceed three times amount of tax sought to be evaded by reason of concealment of particulars of his income or furnishing of inaccurate particulars of such income. 10. two key expressions in Section 271(1)(c) of Act are concealment of particulars of his income and furnishing inaccurate particulars of such income . These two expressions comprise of two limbs for imposition of penalty under Section 271(1)(c) of Act. Gujarat High Court in case of Manu Engineering Vs. CIT, 122 ITR 306 and Delhi High Court in Virgo Marketing P. Ltd. Vs. CIT, 171 Taxmann 156 held that levy of 16 of 24 ITXA-1742-11.doc penalty has to be clear as to limb for which penalty is levied. If Assessing Officer proposes to invoke first limb, then notice has to be appropriately marked. Similarly, if Assessing Officer wants to invoke second limb then notice has also to be appropriately marked. If there is no striking off of inapplicable portion in notice which is in printed format, it would lead to inference as to non - application of mind. In such case, penalty would not be sustainable. 11. Supreme Court in case of Ashok Pai Vs. CIT, 292 ITR 11 observed that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of Act carry different connotations. 12. Let us now advert to substantial question of law proposed by appellant. Through this question, appellant is contending that Tribunal ought to have held that order of penalty passed under Section 271(1) (c) of Act was bad in law in view of fact that at time of initiation of penalty proceedings as well as at time of imposition of penalty, Assessing Officer was not clear as to which limb of Section 271 (1) (c) of Act was attracted. At time of hearing, learned counsel for appellant argued that in show-cause notice inapplicable portion was not struck off; thus it was not indicated in notice whether penalty was sought to be imposed for 17 of 24 ITXA-1742-11.doc concealment of particulars of income or for furnishing inaccurate particulars of income, which has vitiated impugned order of penalty. We have already noted and analyzed two limbs of Section 271(1)(c) of Act and also fact that two limbs i.e. concealment of particulars of income and furnishing inaccurate particulars of income carry different connotations. We have also noticed that Assessing Officer has to indicate in statutory notice for which of two limbs he proposes to impose penalty and for this notice has to be appropriately marked. If in printed format of notice inapplicable portion is not struck off thus not indicating for which limb penalty is proposed to be imposed, it would lead to inference as to non- application of mind, thus vitiating imposition of penalty. 13. In Goa Coastal Resorts & Recreation Pvt. Ltd. (supra) both lower appellate authorities had categorically held that there was no record of satisfaction of Assessing Officer that there was any concealment of income or that any inaccurate particulars were furnished by assessee. In such circumstances, this Court held that two lower appellate authorities had correctly ordered dropping of penalty proceedings against assessee. It was in that context that this Court noted that in notice issued in printed format inapplicable portion was not struck off. Therefore in that case, this Court found that in addition to notice being defective, there was no finding or 18 of 24 ITXA-1742-11.doc satisfaction recorded in relation to concealment or furnishing of inaccurate particulars of income. 14. This Court in recent judgment passed in case of Ventura Textiles Ltd. vs. Commissioner of Income Tax Mumbai City 11 in Income Tax Appeal No.958 of 2017 dated 12.06.2020 was concerned with similar question with respect to issuance of statutory show-cause notice under Section 274 read with Section 271 of Act proposing to impose penalty. While dealing with basic question of validity of notice, this Court in paragraph Nos.23 to 25 held as under :- 23. statutory show-cause notice under Section 274 read with Section 271 of Act proposing to impose penalty was issued on same day when assessment order was passed i.e., on 28.02.2006. said notice was in printed form. Though at bottom of notice it was mentioned 'delete inappropriate words and paragraphs', unfortunately, Assessing Officer omitted to strike off inapplicable portion in notice i.e., whether penalty was sought to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of such income. Such omission certainly reflects mechanical approach and non-application of mind on part of Assessing Officer. 24. However, moot question is whether assessee had notice as to why penalty was sought to be imposed on it? 25. This brings us to basic question as to what is notice or what do we mean by notice. Concise Oxford English Dictionary, Indian Edition, explains notice to 19 of 24 ITXA-1742-11.doc mean fact of observing or paying attention to something; advanced notification or warning; displayed sheet or placard giving news or information. It means to become aware of. In other words, to put someone on notice would mean warn someone of something about or likely to occur. Black's Law Dictionary, Eighth Edition, defines expression 'notice' to mean having actual knowledge of fact; has received information about it; has reason to know it; knows about related fact. In CST Vs. Subhash & Company, (2003) 3 SCC 454 , Supreme Court deliberated upon concept of notice and observed that term 'notice' has originated from Latin word notifia which means being known or knowing . Thereafter, Supreme Court referred to definition of word 'notice' in various general and judicial dictionaries. Without adverting to large number of definitions, suffice it to say notice would mean information, warning or announcement of something impending; notice in its legal sense may be defined as information concerning fact communicated to party by authorized person or actually derived by him from proper source; term notice in its full legal sense embraces knowledge of circumstances that ought to induce suspicion or belief as well as direct information of that fact. 15. In present case, concealment of particulars of income was not charge against appellant, charge being furnishing of inaccurate particulars of income. As discussed above, it is trite that penalty cannot be imposed for alleged breach of one limb of Section 271(1)(c) of Act while penalty proceedings were initiated for breach of other limb of Section 271(1)(c). This has certainly vitiated order of penalty. 20 of 24 ITXA-1742-11.doc 16. On ground that while charge against assessee was of furnishing inaccurate particulars of income whereas penalty was imposed additionally for concealment of income, order of penalty as upheld by lower appellate authorities could be justifiably interfered with, still we would like to examine whether there was furnishing of inaccurate particulars of income by assessee in first place because that was core charge against assessee. 17. In CIT Vs Reliance Petroproducts Pvt. Ltd., 322 ITR 158 (SC), Supreme Court examined meaning of words 'particulars' and 'inaccurate'. As per Law Lexicon, word 'particulars' means 'detail or details; details of claim or separate items of account'. Therefore, it was held that word 'particulars' used in Section 271(1)(c) of Act would embrace meaning of details of claim made. Referring to Webster's Dictionary where word 'inaccurate' has been defined as 'not accurate, not exact or correct; not according to truth; erroneous; as inaccurate statement, copy or transcript', Supreme Court held that two words i.e., 'inaccurate' and 'particulars' read in conjunction must mean that details supplied in return are not accurate, not exact or correct, not according to truth or erroneous. It was held that mere making of claim which is not sustainable in law by itself would not amount to 21 of 24 ITXA-1742-11.doc furnishing inaccurate particulars regarding income of assessee. Therefore, such claim made in return cannot amount to furnishing inaccurate particulars of income. Elaborating further, Supreme Court held that if such stand of Revenue was accepted then in case of every return where claim made is not accepted by Assessing Officer for any reason, assessee will invite penalty under Section 271(1)(c) of Act which is clearly not intendment of Legislature. 18. This decision was followed by this Court in CIT Vs. M/s. Mansukh Dyeing & Printing Mills , Income Tax Appeal No.1133 of 2008, decided on 24.06.2013. In CIT Vs. DCM Ltd., 359 ITR 101, Delhi High Court applied said decision of Supreme Court and further observed that law does not debar assessee from making claim which he believes is plausible and when he knows that it is going to be examined by Assessing Officer. In such case liberal view is required to be taken as necessarily claim is bound to be carefully scrutinized both on facts and in law. Threat of penalty cannot become gag and / or haunt assessee for making claim which may be erroneous or wrong. Again, in CIT Vs.Shahabad Co-operative Sugar Mills Ltd ., 322 ITR 73, Punjab & Haryana High Court held that making of wrong claim is not at par with concealment or giving of inaccurate information which may call for levy of penalty under Section 271(1)(c) of Act. 22 of 24 ITXA-1742-11.doc 19. Reverting back to present case it is quite evident that assessee had declared full facts and sale agreement at first instance; full factual matrix or facts were before Assessing Officer while passing asessment order. It is clear from facts that appellant had never suppressed any material fact from respondent. Hence we are inclined to accept submissions of appellant. It is another matter that claim based on such facts was found to be inadmissible. This is not same thing as furnishing inaccurate particulars of income as contemplated under Section 271(1) (c) of Act. 20. Thus, on careful examination of entire matter, we answer substantial question of law in favour of appellant / assessee. Therefore, on overall consideration, appeal would stand allowed and order of penalty as affirmed by two lower appellate authorities would consequently stand interfered with. 21. Accordingly, appeal is allowed. However, there shall be no order as to costs. ( MILIND N. JADHAV, J. ) ( UJJAL BHUYAN, J. ) Digitally signed by Ravindra M. Ravindra Amberkar M. Date: 2020.08.17 Amberkar 18:20:31 +0530 23 of 24 Omprakash T. Mehta v. Income-tax Officer 21(3)(4), Mumbai