TaxTMI 
TaxTMI 
2016 (6) TMI 360
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....s considered as nil and accepted in the assessment completed for that year. During the previous year relevant to A.Y.2008-09 the assessee negotiated sale of this property and was successful in selling the property to Housing Development Board, Govt. of West Bengal. The property was conveyed under 17 deeds of conveyance for a total consideration of Rs. 1,30,47,125/-. The deed of conveyance was executed on 16.07.2007 and on that date the assessee received a sum of Rs. 83,16,000/-. Since the property was sold during the previous year 2008-09 for a sum of Rs. 1,30,47,125/- the AO was of the view that there was taxable wealth for A.Y.2007-08 under the Act. Therefore proceedings u/s 17 of the Act were initiated against the assessee. 4. In response to the notice u/s 17 of the Act the assessee filed return of wealth on 31.01.2011 disclosing net wealth of Rs. 1,30,47,125/-. The same was accepted by the AO and the assessment was completed on the net wealth returned. In the order of assessment AO initiated penalty proceedings u/s 18(1)(c) of the Act. The order is not clear as to what was the concealment of particulars of wealth or furnishing inaccurate particulars of wealth. The net wealth....
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.... net wealth. The show cause notice is given as an annexure to this order. This Tribunal in the case of Suvaprasanna Bhattacharya vs ACIT (supra) took the following view on valid point of penalty when the show cause notice contains similar defect. The following were the relevant observations :- "8. The next argument that the show cause notice u/s.274 of the Act which is in a printed form does not strike out as to whether the penalty is sought to be levied on the for "furnishing inaccurate particulars of income" or "concealing particulars of such income". 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". 8.1 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 p....
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....ich 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 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 t....
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....nclusion 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 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 Offic....