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TMI Blog2020 (1) TMI 449X X X X Extracts X X X X X X X X Extracts X X X X ..... whether it was concealment of income or furnishing of inaccurate particulars thereof. Impugned penalty order, however, reads that penalty was levied for submitting inaccurate particulars of income. These facts indicate that there is discrepancy as to in respect of which charge the assessee was called upon to defend itself. For the AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in notice u/s 274 of the Act vitiates the assumption of jurisdiction by the learned Assessing Officer to levy any penalty. In this case, facts stated supra, clearly establish that the notice issued under section 274 read with 271 of the Act is defective and, therefore, we find it difficult to hold that the learned AO rightly assu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 36,48,138/-on account of disallowance of the claim of exemption under section 10B of the Act. Learned Assessing Officer simultaneously initiated penalty proceedings under section 271(1)(c) of the Act and concluded them by order dated 18/9/2015 with the levy of penalty of ₹ 22,54,550/-. 3. Aggrieved by such levy of penalty, assessee preferred an appeal before the Ld. CIT(A). Ld. CIT(A) by way of impugned order rejected all the contentions of the assessee and upheld the levy of penalty. Assessee is, therefore, before us in this appeal challenging the penalty order on several grounds, which includes that neither the assessment order nor the penalty noticespecify the exact charge/limb of section 271(1)( c ) of the Act und ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on account of wrong claim of deduction. It could be seen from the notices dated 11/3/2015 issued under section 274 of the Act read with section 271(1)(c) of the Act that the assessee was called upon to defend the charge of having concealed the particulars of income or furnishing inaccurate particulars thereof. Penalty was levied vide order dated 18/9/2015 for submitting incorrect and inaccurate particulars of income. 6. It is pertinent to note that, order passed in section 143(3) of the Act does not specify whether the proceedings were to be initiated for either concealment of income or for furnishing inaccurate particulars or both. It reads that inaccurate particulars of income were furnished thereby concealing an income on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ounds 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 penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Income Tax Act, 1961 (for short the Act ) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgement in the subsequent order in Commissioner of Income Tax v. SSA s Emerald Meadows (2016) 73 taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this court is unable to find any error having been committed by the ITAT. 8. It is, therefore, clear that for the AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in notice u/s 274 of the Act vitiates the assumption of jurisdiction by the learned Assessing Officer to levy any penalty. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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