TaxTMI 
TaxTMI 
2015 (12) TMI 1518
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....d brokerage in commodity futures market with MCX, filed its return of income for A.Y. 2007-08 on 29.10.2007 declaring income of Rs.,14,32,310/-. The case was taken up for scrutiny and the assessment was completed under section 143(3) of the Act vide order dated 30.12.2009 wherein the income of the assessee was determined at Rs. 59,32,310/-, in view of an addition of Rs. 45,00,000/- to the returned income in view of a disclosure made by the assessee vide letter dated 28.04.2008. While completing the assessment, the Assessing Officer ('AO') simultaneously initiated penalty proceedings for concealment of particulars of income by issue of notice under section 274 r.w.s. 271(1)(c) of the Act. Subsequently the AO, vide order dated 28.06.2010,....
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....- in order to buy peace and avoid penalty for modification of code carried out by its sub brokers. 1.4 The appellant further submits that the additional income declared by the appellant is neither supported by any evidence of tax avoidance nor department made any efforts to establish concealment of income and in that the situation no penalty u/s 271(1)(c) can be levied on appellant. 1.5 The appellant further submits that, the peculiar circumstances in which the additional income has been declared clearly shows that neither there is concealment of income, nor of any incorrect particulars of income has been filed and therefore laying of penalty for concealment is totally unjustified. 2.1 The appellant craves leave t....
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....rival contentions on the issue of admission of additional ground raised by the assessee (supra) and considered the material on record in this regard. We find that the additional ground raised by the assessee is a purely legal ground and since the same goes to the very root of the matter regarding the levy of penalty under section 271(1)(c) of the Act, we therefore admit the same for consideration and adjudication in this appeal. 4.3 Alongwith the application for admission of additional grounds, the assessee has also filed a copy of the notice issued under section 274 r.w.s. 271 of the Act dated 30.12.2009 for initiating of the penalty proceedings under section 271(1)(c) of the Act for A.Y. 2007- 08. The learned A.R. for the assessee also....
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....ions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm wh....
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...., 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. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposit....
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....priately 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 conclusion drawn therein by their Lordships at para 63 thereof and particularly at p) to s) thereof are as under: - "63 ..................................... a) ..................................... p) Notice under section 274 of the Act should specifically state the ground mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not....