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TMI Blog2019 (11) TMI 1299X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. This is an appeal filed by the assessee against the order of the ld CIT(A)- 11, New Delhi dated 16.09.2016 for the Assessment Year 2006-07 wherein the penalty u/s 271(1)(c) of the act levied by the ld. Income Tax Officer, Ward 23 (4), New Delhi amounting to ₹ 252230/ is confirmed by the learned CIT(A). 2. The assessee has raised the following grounds of appeal:- 1. The Learned Assessing Officer has wrongly imposed the penalty on the basis of wrong addition of ₹ 8,30,762 ,u/s 10BA, which is not the expenditure but a statutory allowance eligible for Export of handmade Handicrafts. There is no concealment of any wrong particulars. 2. The Learned Assessing Officer has wrongly imposed the penalty of ₹ 2,52,230 on the basis of wrong additions where the Assessee claimed eligible deductions allowable u/s 10BA of I.T.Act, 1961. 3. The learned Assessing Officer has wrongly imposed the penalty on the ground that neither the assessee nor the representative of the Assessee appears or filed any document against the notice. But on 25.03.2014 Mr. V.C. Gautam C.A. appeared and filed written explanat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lty proceedings the assessee also reiterated the submissions made before the learned Assessing Officer during the course of assessment proceedings and stated that the claim made by the assessee has been rejected however it was not found false. The learned Assessing Officer rejected the contention of the assessee and the levied the penalty u/s 271(1)(c ) of the act of ₹ 252230/- holding that assessee has filed inaccurate particulars of its income to the extent of ₹ 830762/- i.e. the amount of deduction claimed under section 10BA of the Income Tax Act. The learned Assessing Officer further noted that if there is a loss of revenue, the levy of penalty is justified and genuine entry or willful concealment is to be proved or loss of revenue as disallowance has been confirmed by the learned CIT(A). Consequently, the order u/s 271(1)(c) of the Act was passed on 31/03/2014 levying the above penalty of ₹ 252230/-. 4. Assessee aggrieved with the order of the learned Assessing Officer preferred the appeal before the learned CIT(A) who also confirmed the penalty as per order dated 16/09/2016 and therefore assessee aggrieved with that order ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... accepted by the assessee also but complete particulars have been furnished by the assessee. It is a mere claim which has been rejected. Further, looking at the notice dated 15/12/2008 issued by the learned Assessing Officer u/s 274 read with section 271 of the Income Tax Act has clearly shows that none of the twin charges have been cancelled by the learned Assessing Officer. Though the ld AO has initiated penalty proceedings on furnishing of inaccurate particulars however in the penalty notice the Assessing Officer has not stated so but has opened both the charges for levy of the penalty. Therefore, there is always a confusion in the mind of the taxpayer. 8. Bare perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act, extracted above, in order to initiate the penalty proceedings against the assessee goes to prove that the AO himself was not aware / sure as to whether he is issuing notice to initiate the penalty proceedings either for concealment of particulars of income or furnishing of inaccurate particulars of such income by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two 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 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 pena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g the SLP filed by the Revenue quashing the penalty by the Tribunal as well as Hon'ble High Court on ground of unspecified notice has held as under:- Section 274, read with section 271(1)(c), of the Income-tax Act, 1961 - Penalty - Procedure for imposition of (Conditions precedent) - Assessment year 2009-10 - Tribunal, relying on decision of Division Bench of Karnataka High Court rendered in case of CIT v. Manjunatha Cotton Ginning Factory [2013] 359 1TR 565/218 Taxman 423/35 taxmann.com 250, allowed appeal of assessee holding that notice issued by Assessing Officer under section 274 read with section 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, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by revenue, same was liable to be dismissed - Held, yes [Para 2] [In favour of assessee] 10. Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X
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