TaxTMI 
TaxTMI 
2016 (3) TMI 1024
X X X X Extracts X X X X
X X X X Extracts X X X X
.... grounds of appeal, we find that the tax effect in the impugned appeals of the revenue is less than Rs. 10 lakhs and hence, same are not maintainable. Now, in the wake of CBDT's Circular No. 21 of 2015 dated 10.12.2015, the monetary limit prescribed for filing of appeal before the Tribunal has been extended upto Rs. 10 lakhs. Further it has also been clarified that this circular will apply on pending appeals also which is evident from para 10 of the impugned Circular, which reads as under:- "10. This instruction will apply retrospectively to pending appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limits in para 3 above may be withdrawn/not pressed. Appeals before the Supreme Court will be governed by the instructions on this subject, operative at the time when such appeal was filed". 4. Thus, the aforesaid appeals filed by the revenue are treated as dismissed as non-maintainable. 5. So far as the assessee's appeal, the same are arising out of identical set of facts, whereby, the assessee has challenged the confirmation of penalty under section 271(1)(c) for Rs. 8,79,597/- in the case of Dipesh M Panjwani and Rs. 8,93,937/....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... qua the legal issue raised in the additional grounds the Ld. Counsel submitted that, firstly, in the assessment order, the AO has not framed any specific charge, on which he intends to impose penalty, he has mentioned under both the charges, which cannot be the case, because both the charges in penalty operates in two different fields. Secondly, he submitted that, in the notice issued under section 274 r.w.s. 271, the AO has not satisfied himself and has not struck off the particular charge, that is, penalty sought to be imposed is whether on concealment of income or for furnishing of inaccurate particulars of income. In the penalty order while levying the penalty, he has levied the penalty for concealing the particulars of taxable income, that is, for concealment of income. Thus, he submitted that such a levy of penalty is not tenable in view of law laid down in catena of decisions including that of the Karnataka High Court in the case of CIT vs Manjunatha Cotton and Ginning Factory, reported in [2013] 359 ITR 565. This decision, he submitted has been followed by various benches of the Tribunal and later on reiterated by the Karnataka High Court again in the case of Steel Industr....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... that any person has concealed the particulars of its income or has furnished inaccurate particulars of income, then he shall be liable for penalty. The satisfaction of the AO at the time of initiation in the course of the proceedings is the vital and key stage where AO has to specify whether penalty is to be initiated for either 'concealing the particulars of the income' or for 'furnishing the inaccurate particulars of income'. The two charges for initiating the penalty operate on two different footing and under the penal provision the charge has to be very specific and not vague. These charges are not to be reckoned as any casual remark, which can be interchanged by the AO at any stage on his whims and fancies. It is not an error which is rectifiable or to be ignored, albeit it is a fatal error which vitiates the entire initiation itself. Howsoever the strong case may be for the levy of penalty on a given fact, the AO should have a proper satisfaction for a levy of a charge for directing the assessee to pay the penalty and such a charge should be specified in the notice itself. There cannot be incongruity in the initiation i.e. while issuing notice and on conclusion of the penalt....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y 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 should be confined only to those grounds and the said grounds have to be specifically state....