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TMI Blog2016 (5) TMI 759X X X X Extracts X X X X X X X X Extracts X X X X ..... Dated:- 7-4-2016 - SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER For The Appellant : Sh. Anil Garg, C.A. For The Respondent : Sh. Raman Kant Garg, Sr.D.R. ORDER PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER This is an appeal filed by the assessee directed against the order of the Ld.CIT(A), Muzaffarnagar dt. 16.1.2013 passed u/s 271(1)(c ) of the Income Tax Act, 1961 (the Act) on 21.7.2013. 2. Facts in brief:- The assessee is an individual and is in the business of whole sale trading of sugar, ghee etc. He carries on business under the name and style M/s N.R.Trading Co. He filed return of income for the A.Y. 2009-10 on 30.9.2009 declaring net profit of ₹ 87,713/-. The A.O. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... clude the decision of the Jurisdictional High Court also, I hold that the angle of concealment of actual income and showing inaccurate particulars of taxable income is more than established, and, therefore, I impose penalty u/s 271(1)(c ) of the Act at @ 300% of tax concealed on ₹ 2,16,300/- which comes to ₹ 1,94,670/-. The AO is directed to issue notice of demand. 3. Aggrieved the assessee is in appeal before us on the following grounds. 1. That having regard to the facts and circumstances of the case, Ld. CIT(A) has erred in law and on facts in imposing the penalty u/s 271(1) (c) ,which is not payable under the Income Tax Act. 2. That in any case and in any view of the matter Ld.CIT(A) has erred in law in im ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and dropped the same, the Ld.CIT(A) does not have any jurisdiction to reinitiate such proceedings or start a fresh proceedings. Thus on this ground alone the penalty is to be quashed. 6. Be it as it may, the Ld.CIT(A) is not clear as to the charge under which he proposes to levy penalty in the show cause notice. The Hon ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory, 359 ITR 565, wherein the Hon ble High Court considered the entire case law on the subject of levy of penalty u/s 271(1)(c ) of the Act and summarized the law as follows. Merely because the assessee agreed for addition does not lead to the inference that the said addition is on account of concealment if the assessee has offered an exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (i) The imposition of penalty is not automatic. (j) Imposition of penalty even if the tax liability is admitted is not automatic. (k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the Assessing Officer in the assessment order. (l) Only when no explanation is offered ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee guilty of another limb is bad in law. (t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. (u) The findings recorded in the assessment proceedings insofar as concealment of income and furnishing of incorrect particulars would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The aS7essmen or reassessment cannot be declared as invalid i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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