TaxTMI 
TaxTMI 
2016 (3) TMI 642
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....therefore we are taking the facts of the case for the A.Y 2006-07 as a lead (ITA No.961/Kol/2013) case for the sake of convenience and passing a consolidated order for all the appeals. In all these appeals, assessee has challenged the orders of Ld. CIT(A) whereby Ld. CIT(A) confirming the order of Assessing Officer imposing penalty on the assessee u/s. 271(1)(c) of the Act. The assessee has raised the following grounds of appeal:- "1. That Ld. CIT(A) having admitted that additional income offered u/s. 132(4) was accepted and included in order u/s 153A has erred in holding no immunity from p0enalty is available. 2. That on the acts and in the circumstances of the case, Ld. CIT(A) is wrong in confirming the penalty order by relying to Explanation 5A of Section 271(1)(c) as substituted by Finance (No.2) Act 2009 with retrospective effect. 3. That on the facts and in the circumstances of the case the conclusion of Ld. CIT(A) that no immunity from penalty u/s 271(1)(c) is available for declaration u/s 132(4) is erroneous and arbitrary since Section 271AAA(2) grants immunity from penalty under similar situations." 3.1 The facts of the case are that assessee ....
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....ssee was voluntary prior to any detection by the revenue and that there was no attempt to conceal particulars of income. The AO however held that but for the search and seizure operation the income declared by the assessee would not have been declared. Accordingly, the AO imposed penalty u/s. 271(1)(c) of the Act on the assessee for AYs 2006-07 to 2009-10. 4. On appeal by the assessee, Ld. CIT(A) confirmed the order of the AO imposing penalty by holding that Explanation 5A to Sec. 271(1)(c) of the Act was applicable to the case and therefore penalty was to be imposed on the assessee and therefore notwithstanding the fact that the income ultimately brought to tax in the assessment framed u/s. 153C of the Act was declared in the return of income filed by the assessee, penalty was to be imposed. Explanation 5A to Sec. 271(1)(c) of the Act reads thus:- "Explanation 5A: Where, in the course of as arch initiated under section 132 on or after the 1sst day of June, 2007, the assessee is found to be the owner of- (i) Any money, bullion, jewellery or other valuable article or ting (hereafter in this Explanation referred to as assets) and the assessee claims that such ass....
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.... as to the exact charge viz., whether the charge is that the assessee has "furnished inaccurate particulars of income" or "concealed particulars of income" by striking out the irrelevant portion of pointed show cause notice, then the imposition of penalty on the basis of such invalid show cause notice cannot be sustained. 8. The learned DR relied on the order of the CIT(A). 9. We have considered the rival submissions. The argument of the learned counsel for the Assessee was that the show cause notice u/s.274 of the Act which is in a printed form and the AO has indicated in the said notice as to whether the penalty is sought to be levied on the assessee for "furnishing inaccurate particulars of income" or "concealing particulars of 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 therefore 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". 9.1. The Hon'ble Karnataka High Court in the case of CIT & ....
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....ee 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, 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....
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....he notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." The final conclusion of the Hon'ble Court was as follows:- "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) 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 ....