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TMI Blog2017 (11) TMI 1164X X X X Extracts X X X X X X X X Extracts X X X X ..... d the information regarding sale of property and the resultant capital gains. The assessment was completed u/s 143(3) on total income of Rs. 16,17,641/- assessing the long term capital gains on sale of landed property and initiated the penalty u/s 271(1)(c) of I.T.Act, and accordingly issued the notice u/s 271(1)(c) of the Act. Subsequently, the AO issued show cause notice and there was no response from the assessee hence the AO imposed the penalty of Rs. 3,36,071/- being 100% of tax sought to be evaded. Aggrieved by the order of the AO, the assessee went on appeal before the CIT(A) and the Ld.CIT(A) dismissed the appeal of the assessee and confirmed the penalty imposed by the AO. Against the order of the Ld.CIT(A), the assessee filed appeal before this Tribunal raising the following grounds along with appeal memo in Form No.36. "1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case. 2. The learned Commissioner of Income Tax (Appeals) is not justified in sustaining the penalty, of Rs. 3,36,071/- levied by the assessing officer u/s 271(1) (c) of the Income Tax Act, 1961. 3. The learned Com ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reiterated the submissions made at the time of admission of additional ground and submitted that it is obligatory on the part of the AO to issue the notice for which limb of the offence, the assessee is required to furnish the explanation. The AO must be satisfied that a person has either concealed the particulars of income or furnished the inaccurate particulars and it should be made known to the assessee in the notice calling for explanation. Ld.AR referring to the notice issued by the AO demonstrated that the AO has not made the assessee to be known for which offence, the assessee required to furnish explanation. The assessing officer issued notice u/s 271(1)(c) r.w.s. 274 which reads as under : "Whereas in the course of the proceeding before me for the Asst.Year 2007-08, it appears to me that you have concealed the particulars of your income or furnished inaccurate particulars of such income" 4.1. From the notice, it is observed that the AO is not sure for which limb of the notice, the AO sought explanation from the assessee. Therefore, Ld.AR argued that the case of the assessee is squarely covered by the decision of the Hon'ble Jurisdictional High Court cited supra and the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gricultural land, deduction u/s.54B is nothing but false without any basis to avoid capital gains taxes. In view of the above, this is a clear case of concealment of income by furnishing false evidences and bogus claims which attracts penalty u/s.271(1)(c)." 5.2. Therefore, according to the Ld.DR the case is distinguishable and benefit of doubt should be given to the revenue but not to the assessee, since the penalty order is very clear with regard to the concealment of income. Responding to the argument of the Ld.DR, Ld. AR referring to page No.7 of the judgement of the Hon'ble High Court of AP argued that the ratio laid down by the Hon'ble High Court is on the issue of Notice but not on the penalty order. In the case of the assessee, the notice issued by the AO is identical to the facts of the assessee and the Hon'ble High Court of AP considering the decision of Manjunatha Cotton and Ginning Factory and the decision of the Gujarat High Court in the case of Manu Engineering Works and also the decision of the Hon'ble Supreme Court in the case of K.P.Madhusudhanan vs. Commissioner of Income, Tax held that the penalty proceedings sought to be initiated by the revenue u/s 271(1)(c) o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aware of the grounds on which imposition of penalty is proposed as he has a right to contest such proceedings and should have the full opportunity to meet the case of the revenue so as to show that the conditions stipulated in Section 271(1)(c) do not exist and that he is not liable to pay the penalty. The Hon'ble High Court of Karnataka in the case law cited held that the practice of the revenue in sending the printed form where all the grounds mentioned in 271(1)(c) are mentioned would not satisfy the requirement of law when the consequence of the assessee not rebutting the initial presumption is serious in nature and has to pay the penalty ranging from 100% to 300% of the tax liability. As the provisions of section 271(1)(c) have to be strictly construed, the Hon'ble High court of Karnataka mandated that the notice issued should be 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. On the similar facts, Hon'ble Supreme Court dismissed the SLP in the case of SSA's Emerald Meadows (2016) 73 Taxman.com 248(SC). Ld.DR's argument that the case is distinguishable on fa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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