9911796707
TMI Blog2019 (4) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... facts of the case are as under: 2.1 The assessee filed his return for Assessment Year 2014-15 on 28.11.2014 declaring total income of Rs. 39,87,160/-. The case was taken up for scrutiny for this Assessment Year and the assessment was concluded under section 143(3) of the Act vide order dated 27.12.2016, wherein the assessee's income was determined at Rs. 57,19,570/-; in view of disallowances amounting to Rs. 17,32,409/-. 2.2 Penalty proceedings under section 271(1)(c) of the Act was initiated simultaneously vide notice under section 274 r.w.s. 271(1)(c) of the Act of even date i.e., 27.12.2016 in respect of the aforesaid disallowances. After considering the assessee's replies in the matter, the AO proceeded to levy penalty of Rs. 5,35,31 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty are to be quashed. 3. In any case, and without prejudice, the learned Assessing officer had erred in levying penalty u/s 271(1)(c) of the Act and the CIT(A) has erred in partially confirming the same. On proper appreciation of facts and circumstances of the case and the law applicable, the appellant having not having committed any default to attract provision of section 271(1)(c) of I.T. Act, 1961, the penalty as levied/confirmed is to be deleted. 4. In any case penalty cannot be levied on adhoc addition. The levy of penalty being bad in law and on facts and is liable to be cancelled. 5. In view of the above grounds and additions grounds to be adduced at the time of hearing, the appellant prays that the order imposing penalty U/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the default; i.e., whether the notice is issued for concealment of income or furnishing of inaccurate particulars of income; is invalid and consequential penalty proceedings / orders are also not valid; the learned AR placed reliance on the decision of the Hon'ble Karnataka High Court in the case of M/s. Manjunatha Cotton & Ginning Factory in 359 ITR 565 (Kar). It was also brought to the notice of the Bench that the penalty under section 271(1)(c) of the Act was levied only for furnishing of the inaccurate particulars and not for both furnishing of inaccurate particulars of income and concealment of income, as laid out in the notice. It was prayed that in the light of the above judicial pronouncements of the Hon'ble Karnataka High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ers are also not valid. The relevant portion of the aforesaid judgment of the Hon'ble Karnataka High Court (Supra) at paras 59 to 61 are extracted hereunder:- "59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein, if the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a rase of relying on deeming provis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it sho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of inaccurate particulars. The Apex Court in the case of Ashok Pal reported in 292 ITR 11 at page 19 has held that. concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of M4NU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO IvL4RKETING reported in 171 Taxman 156, has held that penalty has to be clear as to the limb for which it is levied and the action being unclear penalty is 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 witho ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
