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TMI Blog2017 (7) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Tribunal is correct in law in deleting the penalty levied u/s. 271(1)(c) of the Income-tax Act, 1961? 2. Whether, on the facts and in the circumstances of the case, the Tribunal is correct in deleting the penalty levied u/s. 271(1)(c) by the Assessing officer without taking into consideration provisions of Section 271(1B) of Income-tax Act, 1961 and judicial pronouncement of Honble Supreme Court of India in the case of MAK Data Pvt. Ltd., Vs. CIT 358 ITR 593, wherein, it was specifically held that the A.O has to satisfy whether penalty proceedings be initiated or not during the assessment proceedings and the A.O is not required to record his satisfaction in a particular manner or reduce it into writing? Fac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 03.2010 for which the assessee failed to produce verifiable or credible evidence of a source. The same was therefore treated as unexplained credit/deemed income as per the provisions of Section 68 of the Act of 1961 and assessed as such. In consequence, the assessee was visited with a penalty notice under Section 271(1)(c) of the Act of 1961 on 22.03.2013. The assessee submitted letter dated 17.09.2013 citing the following reasons in support of her plea to drop the penalty proceedings: 1. Disallowance with regard to interest on borrowed capital was on agreed basis. 2. Regarding unexplained cash credit deposit, she was not in a position to establish the source with strict proof of evidence. 3. There is no positive establishment of conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rticulars of income or furnishing of inaccurate particulars of income. Dealing with this contention, the Tribunal placed reliance on the judgment of the Karnataka High Court in THE COMMISSIONER OF INCOME TAX AND THE INCOME TAX OFFICER V/s. M/s.MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 (KAR) and opined that unless the show-cause notice is clear as to whether the penalty proposed to be imposed is for concealment of particulars of income or for furnishing inaccurate particulars of income, no penalty could be imposed, as such a notice would be defective. The Tribunal took note of the fact that in the penalty order; the Assessing Officer had not given a conclusive finding as to whether the penalty imposed was for concealment of pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessee on 22.03.2013 is produced. Perusal thereof reflects that the irrelevant contents therein, which had no application to the assessee, were struck out leaving only one clause which reads as under: Whereas in the course of proceedings before me for the Assessment Year 2010-11 it appears to me that you have concealed the particulars of your income or furnished inaccurate particulars of such income. It would be apposite at this stage to consider the judgment of the Karnataka High Court in M/s.MANJUNATHA COTTON AND GINNING FACTORY [2013] 359 ITR 565 (KAR). Therein, a Division Bench of the Karnataka High Court observed that Section 271 of the Act of 1961 is a specific provision providing for imposition of penalties and is a comple ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ench mandated that the notice issued should set out the grounds which the assessee has to meet specifically, otherwise the principles of natural justice would be offended as the show-cause notice would be vague. Dealing with concealment of particulars of income or furnishing of inaccurate particulars of income, the Bench observed that some cases may attract both the offences and in some, there may be overlapping of both, but in such cases initiation of the penalty proceedings must be specifically for both the offences. Drawing up penalty proceedings for one offence and finding the assessee guilty of another or finding him guilty for either, the one or the other, was held to be unsustainable in law. In COMMISSIONER OF INCOME TAX, GUJARAT-II ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... put on notice as to whether she is to be penalized for concealment of particulars of income or for furnishing inaccurate particulars of income. These are two different acts. Concealment of income is an act of omission while furnishing of inaccurate particulars of income is an act of commission. The consequences of such acts, being penal in nature, an assessee has to be informed as to what exactly is the charge against him so that he may respond thereto. No doubt, in the present case, the assessee seems to have submitted her explanation on merits without raising a doubt as to what was the precise allegation leveled against her. However, we are more concerned with the principle involved and not just the isolated case of its application again ..... X X X X Extracts X X X X X X X X Extracts X X X X
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