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TMI Blog2018 (12) TMI 1091X X X X Extracts X X X X X X X X Extracts X X X X ..... rdingly direct to delete the penalty of ₹ 16,00,000/- imposed u/s 271(1)(c) on this ground itself. - Decided in favour of assessee - ITA No.693/Ind/2016 - - - Dated:- 6-12-2018 - SHRI KUL BHARAT, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER For The Revenue : Shri Rajeeb Jain, Sr.DR For The Assessee : Shri Girish Agrawal, CA ORDER PER MANISH BORAD, AM. The above captioned appeal is filed at the instance of assessee pertaining to Assessment Year 2008-09 and is directed against the orders of Ld. Commissioner of Income Tax (Appeals)-I (in short Ld.CIT(A) ], Bhopal dated 21.03.2016 which is arising out of the order u/s 271(1)(c) of the Income Tax Act 1961(In short the Act ) dated 28.03.2013 framed by DCIT-1(1), Bhopal. 2. Apart from raising an additional ground challenging the legality of the initiation of penalty proceedings u/s 271(1)(c) of the Act on merits the assessee has raised following grounds of appeal; 1. In the facts and circumstances of the case and in law, Ld.CIT(A)-1, Bhopal erred in confirming the penalty of ₹ 16,00,000/- u/s 271(1)(c) levied by Ld.A.O which is contrary to the facts and the applicabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ace on record to challenge the findings of Ld. A.O. Ld.CIT(A) confirmed the levy of penalty u/s 271(1)(c) of the Act. 6. Aggrieved assessee is now in appeal before the Tribunal challenging the legality of the penalty proceedings as well as raising grounds on merits challenging the penalty levied u/s 271(1)(c) of the Act at ₹ 16,00,000/-. 7. Ld. Counsel for the assessee submitted that as per provisions of Section 271(1)(c) of the Act the penalty can be initiated either for concealing the particulars of income or for furnishing inaccurate particulars of income, whereas the Ld.A.O has recorded the charge as furnished wrong particulars and concealed the income . Placing reliance on the judgments mentioned in the written submission reproduced below, the Ld. Counsel for the assessee contended that the Ld.A.O has failed in comply the provisions of section 271(1)(c) of the Act by initiating the penalty proceedings with no specific charge. The relevant extract of written submissions given by Ld. Counsel for the assessee are reproduced below; Ground No.1:In the facts and circumstances of the case and in law, Ld. CIT(A)-I, Bhopal erred in confirming the penalty of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the particulars of his income or furnished inaccurate particulars of such income. Thus the satisfaction of the Assessing Officer about the concealment of particulars of income or furnishing of inaccurate particulars of such income is essential before levying any penalty u/s 271(1)(c). The Assessing Officer as is apparent from the penalty order has not satisfied about the concealment of particulars of income or furnishing of inaccurate particulars of income on the part of the assessee. On this basis itself the penalty deleted. [ emphasis supplied] In the instant case, as Ld. AO failed to initiate the penalty proceedings without creating any specific charge, appellant contends that the penalty order be quashed. 6. While passing the penalty order, Ld. AO has imposed penalty on concealment of particulars of income and the same is confirmed by Ld. CIT(A) by stating that the appellant has not offered any explanation in regard to concealment of income either during penalty proceedings or during appeal proceedings. [CIT(A) order page 6 para 11] Appellant, had already offered detailed explanation on the various property deals relating to the addition made by the Ld. AO i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 976 by which presumption of concealment of particulars of income is raised on account of additions having been made or deductions being disallowed in returned income cannot be held to be retrospective in operation - Held, yes _ Whether fiction created under sections 68, 69, 69A, 69B and 69C by itself, cannot be extended to penalty proceedings to raise a presumption about concealment of such income - Held, yes - Whether on a finding that return of income which is less than 80 per cent of assessed income is not result of fraud or gross or wilful neglect, penalty cannot be sustained by raising a presumption of concealment of income under the Explanation to section 271(1)(c) - Held, yes . b. Hon'ble Karnataka High Court in the case of M.M. Gujamgadi - [2007] 162 Taxman 211 - order dated 08.02.2005 - HEAD NOTE - Section 271(1)(c), read with section 68, of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessing Officer found a sum of ₹ 2,01,000 in books of account of assessee - Assessing Officer issued notice to assessee asking him to explain source of said amount - Assessee replied that he borrowed same from different creditors _ However, despite best ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Counsel for the assessee also placed reliance on the judgments of Hon'ble jurisdictional High Court in the case of CIT V/s Kulwant Singh Bhatia ITA No.9/2018 dated 9.5.2018, judgment of Hon'ble High Court of Karnataka in the case of CIT V SSA s Emeralad Meadows ITA No.380/2015 dated 23.11.2015 and also the judgment of Hon'ble High Court of Karnataka in the case of CIT V/s Majunatha Cotton Ginning Factory(2013) 359 ITR 565 in support of the legal ground that existence of conditions stipulated in Section 271(1)(c) of the Act are necessary for initiation of penalty proceedings u/s 271(1)(c) and the Assessing Officer has failed to mention the specific charge in the penalty notice issued u/s 274 r.w.s. 271(1)(c) of the Act. 10. Per contra Departmental Representative vehemently argued supporting the orders of lower authorities. 11. We have heard rival contentions and perused the records placed before us. The issues raised by the assessee revolves around the levy of penalty at ₹ 16,00,000/- levied by the Ld. A.O and confirmed by Ld.CIT(A) on the addition of ₹ 51,00,000/- from undisclosed sources for purchase of immovable properties. Perusal of records shows ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up before the jurisdictional High Court in the case of Shri Kulwant Singh Bhatia (supra) wherein the Hon'ble Court discussed the judgment of Hon'ble High Court in the case of CIT V/s Manjunatha Cotton Ginning Factory (supra) and CIT V/s SSA s Emeralad Meadows (supra) held that on due consideration of the arguments of the Ld. counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not specify the requirement of law, as notice was not specific, we are of the view that Ld. Tribunal has rightly allowed the appeal of the assessee and set side the order of penalty enforced by the authority . 15. Similarly in the case of CIT V/s Manjunatha Ginning Factory, Hon'ble High Court of Karnataka held that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act should specifically mention the ground in section 271(1)(c) whether concealment of income or for furnishing in accurate particulars of income. Sending printed form where all ground of section 271(1)(c ) would not mentioned the specific requirement of law. Assessee should know the grounds on which he has charged specific otherwise opportunities of natural justice denied. On ..... X X X X Extracts X X X X X X X X Extracts X X X X
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