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TMI Blog2018 (1) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... NEGI, JM For The Assessee : Shri Devendra Jain For The Revenue : Shri V. Justin ORDER PER R.C.SHARMA (A.M) : These are the cross appeals filed by the assessee and revenue against the order of CIT(A)-24, Mumbai dated 04/10/2011 for the A.Y.2005-06 in the matter of penalty imposed u/s.271(1)(c) of the IT Act. 2. Facts in brief are that during the year under consideration, assessee received gift from NRI donor out of natural love and affection, however, same was declined by the AO and added in assessee s income. After addition was confirmed, AO also levied penalty u/s.271(1)(c). Penalty was also levied by AO for the addition made u/s.50C of the IT Act. 3. By the impugned order, CIT(A) deleted penalty with respect to the addition made u/s.50C. However, he has confirmed penalty with respect to addition made u/s.68 of the IT Act. 4. Learned AR has taken legal ground to the effect that notice issued by AO u/s.274 r.w.s.271(1)(c) was in the standard format without pointing out whether penalty is initiated for concealment of particulars of income or furnishing of inaccurate particulars of income, thus, AO has not striked out the irrelevant portion. For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Dy. CIT v. Shri Rajeev Kumar Srivastava (ITA No. 467/Lkw/20Il -Lucknow ITAT) 3. CIT v. Bhuramal Manickchand (1981) 5 Taxman 315 (Cal.) 4. Sixth ITOv. Kumar Metal Industries (199 1)36 iTD 261 (Mum.) 7. As per learned AR, in the instant case, the AO has not made any independent enquiry in penalty proceeding and levied penalty only on the basis of confirmation of addition by appellate authorities. 8. With regard to merit of the penalty so imposed, it was contended by learned AR that assessee has filed all the documentary evidence to discharge initial onus of gift having been genuinely received from NRI. Confirmation of donor was filed alongwith the bank statement. As per learned AR it was a case of not proving and not disproving the facts mentioned by the assessee. As per learned AR, provisions of Section 68 are deeming provisions where unless the facts mentioned by the assessee are disproved, no penalty can be imposed. 9. On the other hand, learned DR relied on the order of the lower authorities and contended that AO has correctly recorded satisfaction regarding concealment of income, therefore, penalty was correctly levied u/s.271(1)(c) of the IT Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned, one of the substantial questions on which the appeal was filed by the revenue was: Whether the notice issued under section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is valid and legal? 13. While answering the above in favour of the assessee, the following findings were recorded by the Hon'ble Court: 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 Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The apex court in the case of Ashok Pai reported in [2007] 292 ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? 17. The aforesaid question was dealt with by the Honble Court in favour of the assessee in the following words: 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with section 271(1)(c) of the Income-tax Act 1961 (for short 'the Act; to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act the penalty proceedings had been initiated le. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunel while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner of Income-tax vs. Manjunatha Cotton And Ginning Factory (2013) 359 ITR 565. 4. In our view since the matter is covered by judgment of the Division Bench of this Court we ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Supreme Court in UOI v/s Dharmendra Textile Processors (2008) 306 ITR 277 (SC). The Hon'ble Jurisdictional High Court in CIT v/s Smt. Kaushalya Ors., [1995] 216 ITR 660 (Bom), observed that notice issued under section 274 must reveal application of mind by the Assessing Officer and the assessee must be made aware of the exact charge on which he had to file his explanation. The Court observed, vagueness and ambiguity in the notice deprives the assessee of reasonable opportunity as he is unaware of the exact charge he has to face. The Hon'ble Jurisdictional High Court in Samson Perinchery (supra), following the decision of Hon'ble Karnataka High Court in CIT v/s Manjunatha Cotton Ginning Factory, [2013] 359 ITR 565 (Kar.), held, order imposing penalty has to be made only on the ground on which the penalty proceedings has been initiated. 21. In addition to the aforesaid binding judgments, there are several orders passed by co-ordinate Benches of the Tribunal on this very point. In all those orders also penalty levied u s. 271(l)(c) of the Act on the basis of similar vague notice was cancelled. 22. It may be mentioned that in this regard, no contrary decision of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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