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TMI Blog2018 (2) TMI 294X X X X Extracts X X X X X X X X Extracts X X X X ..... the impugned order dated 14.09.2015 levying penalty of Rs. 2,91.83.830 under section 271 (1)(c) of the Income-tax Act, 1961 the Act is without jurisdiction, bad in law and void-ab initio. 1.1. That the CIT (Appeals) erred in not appreciating that the impugned order dated 02.08.2017, passed under section 271(1)(c) was barred by limitation prescribed under section 275 of the Act and consequently, bad in law. 1.2. That the CIT (Appeals) erred on facts and in law in not appreciating that satisfaction for initiating penalty was not discernible from the assessment order, which is sine qua non for assumption of jurisdiction to impose penalty. 1.3. That the CIT (Appeals) erred in not appreciating that the penalty imposed without issuance a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The said claim was disallowed by the AO and the income was assessed at Rs. 64,34,83,710/-. The said disallowance was confirmed by the CIT(A) and this Tribunal. The AO vide order dated 14.09.2015 levied penalty of Rs. 2,91,83,830/- u/s 271(l)(c) of the Act. The penalty was confirmed by the impugned order dated 02.08.2017. 4. At the outset, the Ld. AR submits that the penalty proceedings initiated vide notice dated 30.12.2011 and 02.07.2015 did not specifically mention as to whether it is a case for concealment of income or furnishing of inaccurate particulars of income. He submits that the notice does not satisfy the requirements of law. It is further argued that because of the notice being defective, the assessee was not given a proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aid order and if it is a case of relying on deeming provision contained in Explanation 1 or in Explanation 1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in section 271 should be made known about the grounds on which they intend imposing penalty on him as section 274 makes it clear that the assessee has ITA No. 1812& 1844/Bang/2013 Page 5 of 8 a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed form ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what the assessee was called upon to meet. Otherwise, though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend the principles of natural justice and cannot be sustained. Thus, once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the gro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." 7. Even the Hon'ble High Court of Gujarat in the case of National Textiles Vs. CIT 249 ITR 125 held in favor of the assessee on the aforesaid issue. The Hon'ble Karnataka High Court in the case of CIT Vs. SSA Emerald Meadows (supra) dismissed the appeal of the revenue on this issue by following the judgment rendered in the case of Manjunatha Cotton. Against the said judgment, the revenue p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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