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TMI Blog2018 (8) TMI 1312X X X X Extracts X X X X X X X X Extracts X X X X ..... espondent : Shri Abhishek Narang ORDER Per G Manjunatha, AM : These appeals filed by the assessee are directed against the orders of the CIT(A)-1 CIT(A)-2, Thane dated 1-06-2014 01-05-2017 respectively and they pertain to AYs 1997-98 1996-97 respectively. Since facts are identical and issues are common, for the sake of convenience, these appeals were heard together and are disposed of by this common order. 2. The assessee has raised more or less common grounds of appeal for both the assessment years. By these grounds of appeal, assessee has challenged levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961. The assessee also filed an application for filing additional grounds of appeal on 30-07-2018 and taken a legal ground challenging validity of penalty order passed by the AO u/s 271(1)(c) in pursuance to notice issued u/s 274 r.w.s. 271(1)(c) of the Income-tax Act, 1961. 3. The brief facts of the case extracted from ITA No.5106/Mum/2017 for AY 1996-97 are that the assessee company is engaged in the business of trading in iron steel. A survey action u/s 133(6) of the I.T. Act, 1961 was conducted in the group companies of Anil Exim (Pvt) Ltd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5. Considering the facts of the case, the explanation of the assessee was not found to be acceptable on the following grounds:- Rather than furnishing the explanation on merits, the assessee just once again narrated the 'hawala' business of the company. The assessee- once again tried to explain the merits and constraints of 'hawala' transactions which has already been considered in three assessment orders and three appellate order of the CIT(A). Even the ITAT after considering all the facts', constraints and circumstances decided the case twice and issued directions to the Assessing Officer to compute the income of the assessee. Based on which the income of the assessee company was assessed by passing assessment order U/s 143(3) r.w.s. 254 of the I.T.Act,1961 on 22/12/2009. In the explanation submitted, the assessee has claimed deduction in turnover in respect of sister concerns which can not 3 be considered in the penalty proceedings. In is pertinent to mention here that trie assessee has never claimed the deduction on account of turnover of sister concerns. The same was first time claimed before the CIT(A) while filing appeal against the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iving effect to the order of CIT(A)'s order dtd. 15/09/2010] - Rs.12,28,020/- Tax on it (A) Rs.5,28,049/- (ii) Returned income Rs.1,10,620/- Tax on it (B) Rs.47,567/- (iii) Tax sought to. evaded (A-B) Rs.4,80,482/- Penalty leviable:- Rs.4,80,482A ₹ 14,41,4467- Minimum @ 100% of ^4,80,482/-Maximum @ 300% of ?4,80,482/- (iv) Penalty levied Rs.4,80,482/- 5. Aggrieved by the order of the penalty, assessee preferred appeal before the CIT(A). Before the CIT(A) assessee has filed elaborate written submissions which have been reproduced by the Ld.CIT(A) in his order at para 8 on pages 5 to 7 of his order. The Ld.CIT(A), after considering relevant submissions of the assessee held that the assessee had concealed the particulars of its income within the meaning of secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the appellant 's appeal. With regard to the appellant 's contention that sales with sister concerns /group concerns were required to be reduced from the total turnover of the appellant, it has been held by the Hon 'ble ITAT, Mumbai that the issue of commission and total turnover had obtained finality. It was further observed that the appellant had not raised any such issue before the Tribunal in the second found and therefore the ITAT, Mumbai, rejected the appellant's contention in this regard. Therefore, the submission of the appellant regarding determination of income have been finally decided by the ITAT, Mumbai, by dismissing the appellant's appeal. 11. As far as legal submissions of the appellant are concerned, it is seen that the various judgments relied upon by the appellant are primarily relating to two issues i.e. first, the assessment proceedings and penalty proceedings are separate proceedings and penalty cannot be imposed automatically or in a mechanical manner on the basis of the assessment order. Secondly, in the case of estimation of profit, penalty u/s. 271(l)(c) of the IT, Act cannot be imposed. 12. During the course of survey at t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... turnover. The Hon'ble ITAT also directed to determine the net, income, after allowing the actual expenses, incurred for providing entries to the various parties. In view of these facts this is not a case of purely estimation of income, as has been contended, therefore, not tenable and accordingly rejected. Considering the fact that the issues under appeal had already been decided by the CIT(A) 1, Thane, after considering the submissions as well as case laws relied upon, in appellant's own case, in A Yr 1997-98 as above, wherein the facts and circumstances were similar to that of present year, therefore, respectfully following the same parity of reasoning, the penalty of Rs 4,80,482/-, levied u/s 271(l)(c) of the I.T. Act, by the AO is upheld and all the grounds of appeal, raised as above, are dismissed. 6. The Ld.AR for the assessee, at the time of hearing submitted that the Ld.CIT(A) was erred in confirming penalty levied by the AO u/s 271(1)(c) without appreciating the fact that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act is vague in nature and the AO failed to apply his mind before initiation of penalty proceedings to frame a specific charge on the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lar issue and after considering relevant facts, by following the decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra) held that notice issued u/s 274 r.w.s. 271(1)(c) was bad in law as it did not specify under which limb of section 271(1)(c) penalty proceedings had been initiated. The Hon ble Bombay High Court in the case of CIT vs Samson Perincherry (supra) has considered similar issue and by following the decision of Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra) has taken similar view and held that if the AO issued a vague notice without specifying the charge under which penalty proceedings have been initiated, then the whole penalty proceedings is vitiated and consequent penalty order is bad in law. In this case, on perusal of facts available on record, we find that the AO has initiated penalty proceedings by issuing notice dated 22-12-2009 wherein the AO has put a right mark on the printed portion of notice which states for concealing the particulars of your income and / or furnishing inaccurate particulars of such income . We further notice that even in the assessment order, the AO has in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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