9911796707
TMI Blog2019 (9) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... ioned in section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income; only sending printed form where all the grounds mentioned in Section 271 are mentioned would not satisfy the requirement of law. The assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice are violated. On the basis of such proceeding, no penalty could be imposed on the assessee. Therefore, the initiation and imposing of penalty proceedings is wrong, bad in law, invalid and void ab initio in view of judicial pronouncements referred by assessee. For the reasons that now there is a settled law position on the issue that the notice u/s 271 should be specific on imposing of penalty u/s 271 (1) (c) i.e. concealed particulars of income or furnishing inaccurate particulars of income. See CIT Vs. M/s SSA s Emerald Meadows [ 2015 (11) TMI 1620 - KARNATAKA HIGH COURT] or M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... nd is purely a legal ground which was left to be included in memo of appeal inadvertently and no new facts are required to be brought on record. Following the judicial pronouncements of Hon'ble Supreme Court in the case of NTPC Ltd. Vs CIT 229 ITR 38 and Jute Corporation of India Ltd. Vs CIT 187 ITR 688 (SC), I accept the additional ground which is purely legal in nature and goes to the root of the issue and for which all the facts are available on record. 5. It was argued by the ld AR of the assessee that in the notice issued U/s 274 r.w.s. 271 (1)(c) dated 08/12/2010 given following reason for initiation penalty: "Conceal the particulars of income or furnished inaccurate particulars of income." He further invited our attention to the notice dated 01/03/2016 issued U/s 274 r.w.s. 271 of the Act, which reads as under: "Penalty proceedings under above mentioned section of the Income tax Act, were initiated during the course of assessment proceedings in your case for the above-mentioned assessment year and the statutory notice has already been issued to you and duly served upon you. Now there proceedings are to finalized and for that purpose you are again given an opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sustained in his hand. The assessee and said companies disclosed all material facts in the return filed. There was neither any concealment of income nor furnishing of any inaccurate particulars thereof. The addition was made under the deeming provisions of section 2(22)(e) which assessee was not well aware even with his sufficient cogency. It is submitted that assessee has made all the necessary disclosure and so rigours of penalty u/s 271 (1) (c) cannot be invoked in case of assessee only because of deeming provisions. It is settled law that any addition made to the income of assessee under deeming provisions of Act no penalty. u/s 271 (1) (c) is exigible as has been held by courts for similar deeming provision u/s 50C of the Act. Reliance was placed on the decision of the ITAT Delhi Bench in the case of I.T.O. Vs. Shri Prakash Narain Singh (ITA No. 2691/Delhi/2013), I.T.O. Vs. Quisotic Health Care (ITA No. 163/Chd/2015) and Rajesh L. Durgani Vs. ACIT, Circle 18(3) Mumbai in support of above contention. 10. Reliance was also placed on the decision of the Hon'ble Apex Court decision in the case of CIT Vs. Reliance Petro Products Ltd. in Civil Appeal No. 2463 of 2010. In this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A). 13. I have heard the rival contentions and carefully gone through the orders of the authorities below and found from the record that the charge levied by the A.O. while issuing notice U/s 274 r.w.s. 271(1)(c) of the Act was vague in so far as notice so issued did not clearly mention the limb on which amount penalty has been initiated i.e. whether for concealment of particulars of income or for furnishing inaccurate particulars of income, thus, I found that the A.O. has just issued pre-printed notice without striking off the unnecessary portions of the notice. If the A.O. was of the view that the assessee has concealed the income or furnishing inaccurate particulars of income then he should have deleted or not mentioned the other limb for imposition of penalty i.e. concealing the particulars of income. The above act of the A.O. clearly shows that the entire exercise of initiation of penalty proceedings has been done without application of mind. It is the requirement of law that notice under section 274 of the Act should specifically state the grounds mentioned in section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come. Thereafter the penalty levied by holding that the assessee has furnished inaccurate particulars of income and concealed the income. As there is a variation in the reasons given for initiation of penalty in the show cause notice issued U/s 274 vis a vis reason given in the penalty order passed U/s 271(1)(c) of the Act, penalty so imposed is not sustainable. For the reasons that now there is a settled legal position on the issue that the notice u/s 274 should be specific on imposing of penalty u/s 271(1) (c) of the Act i.e. concealed particulars of income or furnishing inaccurate particulars of income. 16. The same view has been upheld by the Hon'ble Rajasthan High Court in the case of Shevetha Construction Co. Pvt. Ltd. (supra), ITAT Jaipur Bench in the case of Narayana Heights & Towers Vs ITO in ITA No. 1033/JP/2016 and Lal Chand Mittal Vs DCIT in ITA No. 772/JP/2016 order dated 29/12/2011. 17. The ITAT, Amritsar Bench (THIRD MEMBER) in the case of HPCL Mittal Energy Ltd. Vs Add. CIT, Circle-1, Bhatinda (supra) has held that "when Assessing Officer is satisfied at stage of initiation of penalty proceedings of a clear-cut charge against assessee of concealment of particular ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
