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TMI Blog2015 (12) TMI 1518X X X X Extracts X X X X X X X X Extracts X X X X ..... nt : Shri Sunil M Lala For the Respondent : Shri C N Angolkar ORDER Per Jason P Boaz, AM This appeal by the assessee is directed against the order of CIT(A)-38, Mumbai dated 30.11.2010 confirming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 (in short the Act') for A.Y. 2007-08. 2. The facts of the case, briefly, are as under: - 2.1 The assessee, a company engaged in the business of trading and brokerage in commodity futures market with MCX, filed its return of income for A.Y. 2007-08 on 29.10.2007 declaring income of Rs.,14,32,310/-. The case was taken up for scrutiny and the assessment was completed under section 143(3) of the Act vide order dated 30.12.2009 wherein the income of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding that certain trade modification carried out by appellant given rise to setting off profit against losses leading to separation of profit arising on the transaction made on MCX , without any supporting evidence and only on the basis of conjecture and surmises. 1.3 The appellant submits that it has fully co-operated with the department and as per the advice of the appellant department only, appellant has declared additional income of ₹ 45,00,000/- in order to buy peace and avoid penalty for modification of code carried out by its sub brokers. 1.4 The appellant further submits that the additional income declared by the appellant is neither supported by any evidence of tax avoidance nor department made any efforts to estab ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 30.12.209 is placed in assessee's paper book-2). The learned A.R. for the assessee also placed before us a copy of the decision of the Bangalore Bench of the Tribunal in the case of Roadlinks India Pvt. Ltd. vs. ACIT in ITA No. 1485/Bang/2013 dated 27.02.2015, wherein the Bench in similar circumstances has admitted the additional ground and disposed off the assessee's appeal on the legal grounds so raised. 4.2 We have heard the rival contentions on the issue of admission of additional ground raised by the assessee (supra) and considered the material on record in this regard. We find that the additional ground raised by the assessee is a purely legal ground and since the same goes to the very root of the matter regarding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings can be initiated on various ground set 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 refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence 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 to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was calle ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... connotations, The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Thom, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. The conclusion drawn therein by their Lordships at para 63 thereof and particularly at p) to s) thereo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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