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TMI Blog2015 (9) TMI 57X X X X Extracts X X X X X X X X Extracts X X X X ..... ears 2003-04 to 2006-07. 2. At the time of hearing, learned counsel for the assessee invited our attention to the additional ground raised by the assessee, wherein the assessee had challenged the validity of penalty orders. The learned authorised representative submitted that the Assessing Officer has stated in the assessment order for the years under consideration that the assessee has "concealed its particulars of income and hence penal proceedings are initiated under section 271(1)(c) of the Act". However, in the penalty order, the Assessing Officer has concluded that the assessee has deliberately furnished inaccurate particulars of their income and accordingly levied penalty. The learned authorised representative submitted that the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rescribed under section 271(1)(c) of the Act. Accordingly he submitted that the assessee was not right in submitting that the Assessing Officer has initiated penalty proceedings for the default relating to concealment of its particulars of income only. The learned Departmental representative submitted that the Assessing Officer, during the course of penalty proceedings, has come to the conclusion that the assessee has furnished inaccurate particulars of income. Accordingly the learned Departmental representative contended that these orders cannot be found fault on this legal/technical ground, since the penalty proceedings have been initiated for both defaults which fact is evident from the penalty notices issued by the Assessing Officer. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bservations made by the Assessing Officer in the assessment orders would show that the penalty proceedings were initiated for "concealment of particulars of income" only. However in the penalty order, the Assessing Officer has concluded as under : "Thus it is clear that the assessee has tried to evade the taxes on income by filing inaccurate particulars of their income and thereby concealing the same. I therefore, hold that the assessee in this case has deliberately furnished inaccurate particulars of their income for relevant previous year thereby attracting penalty provision under section 271(1)(c) of the Income-tax Act. I am therefore, satisfied that this is a fit case for levy of penalty under section 271(1)(c) of the Act, 1961." Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e initiated for 'failure to furnish inaccurate particulars of income and however, the penalty was levied for concealment of income'. 12.1. In this regard, we have perused the said paras 59 to 61 of the hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn) and the same read as under (page 599) : 'Notice under section 274 59. As the provision stands, the penalty proceedings can be initi ated on various ground set out therein. If the order passed by the authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under section 274, they could conveniently re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The apex court in the case of T. Ashok Pai v. CIT reported in [2007] 292 ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of CIT v. Manu Engineering Works reported in [1980] 122 ITR 306 (Guj) and the Delhi High Court in the case of CIT v. Virgo Marketing reported in [2008] 171 Taxman 156, has held that levy of penalty has to be clear as to the li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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