TaxTMI 
TaxTMI 
2015 (6) TMI 384
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....ment Year 2002-03, with partial modification. 2. The facts of the case, briefly, are as under :- 2.1 The assessee, a company carrying on the business of transporters, filed its return of income for Assessment Year 2002-03 on 29.10.2002 declaring NIL income after setting off unabsorbed depreciation of Assessment Year 1996-97 to the extent of Rs. 2,54,654. 'Book Profits' of Rs. 1,45,662 were computed and declared under Section 115JB of the Act. The case was selected for scrutiny and the assessment was completed under Section 143(3) of the Act vide order dt.28.3.2005, wherein the income of the assessee was determined at Rs. 3,06,290 after setting off of unabsorbed depreciation of Rs. 25,57,780; as against the returned income at N....
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....ang/2007 dt.17.10.2008. Thus, the penalty levied under Section 271(1)(c) of the Act in respect of the addition of Rs. 28,58,070, in respect of unexplained cash credits under Section 68 of the Act, was modified and the said penalty was confirmed in respect of the additions to the extent of Rs. 9,49,590 (i.e. Rs. 9,04,450 plus Rs. 49,140) which were upheld in the order of the co-ordinate bench of this Tribunal (supra). 3. Aggrieved by the order of the CIT (Appeals) - I, Bangalore dt.11.9.2013 for Assessment Year 2002-03, the assessee is now in appeal before us raising the following grounds :- "1. The orders of the authorities below in so far as levying penalty under Section 271(1)(c) of the Act against the appellant are opposed to law, ....
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....ing of the appeal, your appellant humbly prays that the appeal may be allowed and justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs." 4.1 In the course of hearings before the Bench on 10.1.2015, the assessee filed an application for admission of additional grounds of appeal :- "1. The order of penalty passed under Section 271(1)(c) of the Act is bad in law as the notice issued under Section 274 rws 271 of the Act is not discernable as to whether the penalty proceedings is initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and in the circumstances of the appellant's case and t....
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....horised Representative also placed before the Bench, for our perusal, the original notice dt.28.3.2005 issued by the Assessing Officer. A perusal of the notice issued under Section 274 r.w.s. 271 of the Act dt.28.3.2005, reveals that the Assessing Officer has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee; i.e. whether it is the concealment of particulars of income or furnishing of inaccurate particulars of income that the penalty under Section 271(1)(c) of the Act is sought to be levied. We find that the Hon'ble High Court of Karnataka in its order in the case of M/s. Manjunatha Cotton & Ginning Factory in ITA No.2564 of 2005 dt.13.12.2012 has held that s....
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....form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed 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, ....
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....tion of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has ....