TaxTMI 
TaxTMI 
2016 (9) TMI 595
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....ome in different assessment years. The group made total disclosure of Rs. 6 crore in the hands of various assessees of the group. In the case of instant assessee i.e. Shri Kartik Mehra disclosure of additional income of Rs. 7,96,291/- was made for A.Y. 2004-05 to A.Y. 2007-08. For the year under consideration the assessee made disclosure of Rs. 4,00,000/-. The assessee filed his return of income for the year declaring total income of RSA,25,402/- which includes the additional income of Rs. 4,00,000/-. The original return of income was Wed on 06.12.2004 wherein the aforesaid . additional income was not declared. The assessment was by the on 31.12.2010 at the assessed income of Rs. 4,25,402/-. While completing the assessment, the AO initiated penalty proceedings u/s 271( 1)( c) of the Act for not disclosing the income of Rs. 4,00,000/- in the original return. During the course of penalty proceedings it was submitted before the AO that no penalty is leviable in his case because the additional income of Rs. 4 lakh was declared in the course of search and same was considered in the return filed by him and tax was paid. It was contended that there was no difference in the returned income....
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....y or WTO and the assessee has also not raised a specific ground of appeal in this regard before the Tribunal. He relied on the order of CIT(A). 6. We have considered the rival submissions. In ground no.1 the assessee has submitted that the order of the CIT(A) was bad in law. This ground , in our opinion, is sufficient to raise the plea that the show cause notice u/s 274 of the Act being defective and the consequent imposing of penalty is not legal. So far as the merits of the submissions made by the ld. Counsel for the assessee is concerned we find from the show cause notice that the AO has not even indicated the section under which penalty is sought to be levied on the assessee. The show cause notice also does not indicate as to whether penalty was sought to be levied on the assessee for concealing or furnishing inaccurate particulars of 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.....
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....oned 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 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 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....
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....rted in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard pro forma without striking of the relevant clauses will lead to an inference as to nonapplication 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 st....