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TMI Blog2016 (10) TMI 525X X X X Extracts X X X X X X X X Extracts X X X X ..... is allowed. - ITA No. 6752/Mum/2014 - - - Dated:- 19-8-2016 - SHRI JASON P.BOAZ, ACCOUNTANT MEMBER AND SHRI SANDEEP GOSAIN, JUDICIAL MEMBER For The Appellant : S/Shri Naniwadekar and Ruturaj H. Gurjar For The Respondent : Ms. Anu Krishna Agarwal ORDER PER JASON P. BOAZ,A.M: This appeal by the assessee is directed against the order of CIT(Appeals)-13, Mumbai dated 4/09/2014 confirming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 ( in short the Act ) for the assessment year 2010-11. 2. The facts of the case as emanate from the record, briefly, are as under:- 2.1 The assessee, a company engaged in the business of producing, acquiring, marketing and distribution of music in India, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o ₹ 22,17,577/-. The concealment penalty of levied under section. 271(1)(c) of the Income tax Act should be cancelled. 2. The appellant reserves its right to add to, alter, amend, modify or delete any of the grounds taken in this appeal. 4.1 Subsequently, by letter dated 3/2006, the assessee field additional grounds of appeal which read as under:- On facts and circumstances of the case, the order of penalty u/s 271 (1)(c) of the Act is bad in law and void ab initio, as the notice issued u/s 274 r. w.s. 271 is not in accordance with law. From the notice, it is not discernible as to why penalty is initiated, whether the penalty is initiated for furnishing of inaccurate particulars of income or for concealment of income, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lication for admission of additional grounds, the assessee has also field a copy of the notice issued u/s. 274 of the Act dated 8/3/2013 for initiating penalty under section 271(1)(c) of the Act for assessment year 2010-11. A perusal of the said notice reveals that the Assessing Officer has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee; i.e., whether it is concealment of particulars of income or furnishing of inaccurate particulars of income that the penalty under section 271(1)(c) of the Act is sought to be levied. In this regard, we find that the Hon ble High Court of Karnataka in its order in the case of M/s.Manjunatha Cotton Ginning Factory, (2013) 359 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 4.5 It may be mentioned that in this regard no contrary decision of the Hon ble Apex Court or the Hon ble Bombay High Court has brought to our notice or placed before us for consideration. Therefore, respectfully following the decision of the Hon ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory ..... X X X X Extracts X X X X X X X X Extracts X X X X
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