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TMI Blog2018 (10) TMI 1783X X X X Extracts X X X X X X X X Extracts X X X X ..... tances, it does not amount to concealing the particulars of income or furnishing of inaccurate particulars of income during assessment proceedings. Moreover, entry for the advance received by the assessee in his bank passbook cannot be termed as books of account so as to attract the provisions contained u/s 68 of the Act. Hon ble Supreme Court in a case cited as CIT vs. Reliance Petro Products Pvt. Ltd. [2010 (3) TMI 80 - SUPREME COURT] decided the identical issue in favour of the assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... entry of ₹ 15,00,000/- was treated as bogus, the evidence to prove that the assessee gave cash to purchase the said entry is absent. 7. That on page 9 para 7 of the assessment order the assessee has been held guilty of "furnishing inaccurate particulars", however on page 10 first para he has been held guilty of "concealment", Thus the charge against the assessee befitting the levy of penalty U/S 271(1)(C) is unspecific and hence the L'd Commissioner Of Income Tax (Appeals) has failed to appreciate that in these circumstances penalty was unexigible and further L'd CIT(A) has also not at all considered the law propounded by New Sorathia Engineering Co. Vs CIT 282 ITR 642 (Gujarat) which was cited before him. 8. That the L'd Commissioner Of Income Tax (Appeals) has failed to appreciate that the grounds for initiation of penalty U/S 271(1)( C) were never given to the assessee and a blind reliance was placed on the assessment only for levying penalty as in the impugned proceedings. 9. That the order of the L'd Commissioner Of Income Tax (Appeals) is arbitrary, against the facts and circumstances of the case, illegal and be therefore qua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alty proceedings as the assessee company has not been made aware if it has concealed the particulars of income or has furnished inaccurate particulars of such income and relied upon the decision rendered by the Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors. 359 ITR 565 (Karn.); that the assessee has suo motu made disclosure of entire detail in the bank passbook which is not books of accounts but due to old age and ill health, he could not prove the facts. 8. However, ld. DR for the Revenue to repel the arguments addressed by the ld. AR for the assessee company contended inter alia that the notice issued by the AO u/s 274 of the Act is not standalone document which is based on assessment order; that the notice has been issued in respect of furnishing inaccurate particulars of income and relied upon the cases of Sundaram Finance Ltd. vs. CIT - (2018) 403 ITR 407 (Madras), CIT vs. Smt. Kaushalya - (1995) 216 ITR 660 (Bombay), Trimurti Engineering Works - 25 taxmann.com 363, Hybrid Rice International Pvt. Ltd. vs. CIT - ITA No.285/Del/2007, Earthmoving Equipment Service Corporation vs. DCIT - (2017) 166 ITD 113 (Mumbai), DCIT vs. Shahrukh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. 11. Bare perusal of the notice issued to the assessee u/s 271(1)(c) of the Act reproduced above goes to prove that assessee has not been called upon to explain if he has concealed the particulars of income or furnished inaccurate particulars of such income rather a tick has been marked against both the charges mentioned in the printed proforma. Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory & Ors. (supra) dealt with the identical issue threadbare and came to the following conclusion :- "63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Ever if there is no specific findin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment ..... X X X X Extracts X X X X X X X X Extracts X X X X
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