2016 (8) TMI 961

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the ingredients are satisfied for levy of penalty under section 271(1)(c) of the I.T.Act in the case of assessee?" 2. We have heard Mr. E.I. Sanmathi, learned Counsel appearing for the appellants. 3. The contention raised on behalf of the appellants is that the Tribunal in the impugned order has relied upon the decision of this Court in the c ase of M/s.Manjunatha Cotton and Ginning Factory in ITA  No.2564/2005 dated 13.12.2012. However, his contention is that subsequently the decision of this Court in case of M/s.Manjunatha Cotton and Ginning Factory is followed in other matter against which S.L.P. are filed before the Apex Court and the matters are pending. 4. We may record that the Income Tax Appellate Tribunal in its reas....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....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 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....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ustained. 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 imposition 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 cou....