TMI Blog2017 (3) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... WAL, VICE PRESIDENT and SHRI KULDIP SINGH, JUDICIAL MEMBER For The Assesse : Shri Salil Agarwal, Advocate and Shri Shailesh Gupta, CA For The Revenue : Shri S.K. Jain, DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Appellant, M/s. Mindmill Software Limited (hereinafter referred to as the assessee ), by filing the present appeal sought to set aside the impugned order dated 26.10.2015 passed by the Commissioner of Income-tax (Appeals)-19, New Delhi qua the assessment year 2008-09 confirming the penalty levied u/s 271(1)(c) of the Income-tax Act, 1961 (for short the Act ) on the grounds inter alia that :- 1. That on the facts and circumstances of the case, the CIT (Appeals) erred on facts and in law in not quashing the penalty order dated 30.03.2014, passed by the assessing officer under section 271 (1) (c) of the Income-tax Act, 1961, being beyond jurisdiction, bad in law and void ab-initio. 2. That on the facts and circumstances of the case, the CIT(Appeals) erred on facts and in law in not quashing the penalty order dated 30.03.2014, passed by the assessing officer under section 271 (1) (c) of the Income-tax Act, 1961 for concealment of income w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs of difference of opinion, penalty was clearly not exigible. 9. That the CIT (Appeals) erred on facts and in law in upholding the action of the assessing officer in sustaining penalty on addition made on account of ROC Fee paid for increase of authorized share capital even though entire information regarding the same was available before the Assessing Officer in the form of audited accounts. 10. That the CIT (Appeals) erred on facts and in law in upholding the action of the assessing officer in sustaining penalty on addition made on account of Electricity Expenses by stating that corresponding revenue had not been booked and by disregarding the fact that right to revenue could not be recognized unless bill for same was raised which was only done during next year, hence could never be recognized as income during the year under appeal. 11. That the CIT(Appeals) erred on facts and in law in not appreciating that there was no loss to revenue on account of claim of electricity expenses as claim per se had not been assessed as bogus but it was matter time when the expense could be claimed. That whereas assessee claimed expense during the year and the Assessing officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee which has also been confirmed by the ld. CIT (A); and similarly, deduction of ₹ 22,000/ was rental claimed out of fee paid to ROC for an increase in authorized capital in violation of the Act and the same has also been upheld by the ld. CIT (A) and thereby imposed the penalty to the tune of ₹ 20,08,652/- u/s 271(1)(c) of the Act. 3. Assessee challenged the penalty order before the ld. CIT (A) by way of appeal who has partly allowed the appeal. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the light of the facts and circumstances of the case. 5. Ld. AR for the assessee challenging the impugned order contended inter alia that the assessee has not made any concealment of income nor furnished inaccurate particulars; that the books of account has been duly audited; that the penalty cannot be imposed on the basis of inadvertent mistake and to impose the penalty there must be some deliberate default; that in the show cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not be made under section 271 of the Income Tax Act, 1961. If you do not wish to 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 before any such order is made under section 271. Sd/- Assessing Officer, Income-tax Officer, Ward 6(4), Room No.418, C.R. Building, New Delhi-2 *Delete inappropriate words and paragraphs. 10. Bare perusal of the notice issued to the assessee u/s 271(1)(c) of the Act reproduced above goes to prove that assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income rather a tick has been marked against both the charges mentioned in the printed proforma. Hon ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory Ors. (supra) dealt with the identical issue threadbare and came to the following conclusion :- 63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
