9911796707
TMI Blog2024 (5) TMI 433X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 292B of the Act cannot cure the basic defect in assumption of jurisdiction and only cure the mistake, defect or omission in return of income, assessment, notice or the proceeding is in substance and effect in conformity with or according to intent and purpose of the Act. As decided in Shri K. Prakash Shetty [ 2014 (6) TMI 976 - ITAT BANGALORE ] the provisions of sec.292BB would not come to the rescue of the revenue, when the notice was not in substance and effect in conformity with or according to the intent and purpose of the Act. In our view, the notice issued by the Assessing Officer was not in substance, and effect in conformity with or according to the intent and purpose of the Act, since the Assessing Officer did not specify the charge for which penalty proceedings were initiated and further there was non- application of mind on the part of the Assessing Officer. Decided in favour of assessee. - SHRI GEORGE GEORGE K., VICE PRESIDENT AND SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER For the Appellant : Shri R. Chandrashekar, A.R. For the Respondent : Shri Subramanian S., D.R. ORDER PER BENCH: 1. ITA Nos.998/Bang/2023 to 1001/Bang/2023 and ITA No.1144/Bang/2023 are emanated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f such income by striking off the irrelevant portion of the printed show cause notice. On this aspect we find that in the show cause notice u/s. 274 of the Act the AO has not struck out the irrelevant part. It is not spelt out as to whether the penalty proceedings are sought to be levied for furnishing inaccurate particulars of income or concealing particulars of such income . 4.1 The Hon'ble Karnataka High Court in the case of CIT Anr. v. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Karn), has held that notice u/s. 274 of the Act should specifically state as to whether penalty is being proposed to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of income. The Hon'ble High court has further laid down that certain printed form where all the grounds given in section 271 are given would not satisfy the requirement of law. The Court has also held that initiating penalty proceedings on one limb and finding the assessee guilty in another limb is bad in law. It was submitted that in the present case, the aforesaid decision will squarely apply and the orders imposing penalty have to be held as bad in law and liable to be quashed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings 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 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 natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... scernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Even if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation 1(A) (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings. 4.4 It is clear from the aforesaid decision that on the facts of the present case that the show cause notice u/s. 274 of the Act is defective as it does not spell out the grounds on which the penalty is sought to be imposed. Following the decision of the Hon'ble Karnataka High Court, we hold that the orders imposing penalty in all the assessment years have to be held as invalid and consequently penalty imposed is cancelled. 4.5 We may also add that the provision of section 292B of the Act cannot cure the basic defect in assumption of jurisdiction and only cure the mistake, defect or omission in return of income, assessment, notice or the proceeding is in substance and effect in conformity with or according to intent and purpose of the Act. As we have already seen that the Hon'ble Karnataka High Court in the decision referred to earlier view the show cause notice and the reasons mentioned in the show cause notice are part of the process of the natural justice and the defect in such notice cannot be overlooked. In view of the aforesaid decision, we do no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or to participate in the proceedings on account of pandemic and the office of the tax consultant was not functioning and was not available and assessee could not get bank statement on account of pandemic, which was ultimately lead to an order of ex-party assessment on 14-10-2019. 5.2 The Assessee has submitted the returns filed for earlier years which are also concluded u/s. 143(3) of the Act on 12-12-2018 accepting that the assessee is carrying on business and assessee opted provisions of section 44AD of the Act. Assessee since unable to trace the orders of earlier years, the same were not placed on record. Some of the deposits are withdrawn from other bank and re-deposited in order to honour cheques or amounts which could not be paid to the supplier for availability of the person. 5.3 Assessee is in appeal against the ex-party order of assessment dated 14-10-2019 for the assessment year 2017-18 determining the income at Rs. 60,12,114/- and subjecting the income to tax for special rates applying the provisions of section 115BBE of the Act. 5.4 Assessee went in appeal before NFAC and the NFAC observed that assessee was asked to file written submissions on 10.3.2023, 31.8.2023 20.9. ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
