TaxTMI 
TaxTMI 
2016 (10) TMI 599
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.... 3. The only aspect to be considered in the present appeal is the order for imposition of penalty under Section 271 (1)(c) of the Act and whether such penalty could survive in view of the decision of this Court in case of COMMISSIONER OF INCOME-TAX AND ANOTHER vs. MANJUNATHA COTTON AND GINNING FACTORY reported in [2013] 359 ITR 565 (KAR), inspite of the fact that said decision was brought to the notice of the lower authority including Tribunal. 4. The facts of the case appear to be that in the assessment proceedings the assessment order came to be passed by the assessing authority and ultimately the penalty of `1,78,35,511/- was imposed under Section 271 (1)(c) of the Income Tax Act, 1961 (for short the 'Act') vide order dated 29.06.2009. 5. The matter was carried in appeal before the Commissioner of Income-Tax (Appeals) (for short 'CIT'). In the said appeal, the Commissioner did not interfere with the order of imposition of penalty. The matter was further carried before the Appellate Tribunal. Appellate Tribunal by the impugned order dated 13.01.2015 on the aspects of penalty made the following observations at paragraph 6.4.1. to 6.4.7 as under: "6.4.1 We have heard the rival ....
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....d by the assessee, the penalty levied was deleted on the ground that the Tribunal had recorded a categorical finding that there was no material to infer concealment of income or furnishing of inaccurate particulars of income and therefore penalty could not be levied merely because the assessee surrendered additional income consequent to survey action. In the case on hand, however, the penalty has been levied because the assessee could not furnish any evidence in support of the claim of expenditure incurred made in the return of income/ financial statements and the presumption has not been rebutted. The facts of he cited cased vis-à-vis the case on hand are quite different. 6.4.4. In the case of SAS Pharmaceuticals (supra), it was held that there cannot be any penalty levied only on surmises, conjectures and possibilities and since 271(1)(c) of the Act has to be construed strictly, unless there is actually concealment of income or non-disclosure of the particulars of income, penalty cannot be levied as the assessee has made a complete disclosure in the return of income. In the case on hand, however, the penalty has been levied because the assessee could not furnish any evid....
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....d because the assessee had given a cogent explanation and therefore discharged the onus upon it. In the case on hand, however, the assessee has not given any explanation supported by material evidence to substantiate the claim made in the return of income and as such, the decision in the cited case is not applicable to the facts of the case on hand. In view of the above discussion of the facts and circumstances of the case, we are of the considered view that the decision of the learned CIT (A) in confirming the levy of penalty u/s.271(1)(c) of the Act on this point does not call for any interference by us. Consequently, Ground Nos.3 and 4 of the assessee's appeal are dismissed." Under circumstances, the present appeals are before this Court. 6. A perusal of above observations made by the Tribunal would indicate that during the course of hearing the attention of Tribunal was brought to the decision of this Court in the case of COMMISSIONER OF INCOME-TAX AND ANOTHER vs. MANJUNATHA COTTON AND GINNING FACTORY reported in [2013] 359 ITR 565 (KAR) (supra). However, Tribunal did not accept the contention of the assessee by examining the facts to the extent that the penalty has not bee....
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....o 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 Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). (h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. (i) The imposition of penalty is not automatic. (j) Imposition of penalty even if the tax liability is admitted is not automatic. (k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the assessment order. (l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that....
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..... As per the above referred decision of this Court, the notice would have to specifically state the ground mentioned in Section 271 (1)(c) of the Act namely as to whether it is for the concealment of income or furnishing incorrect particulars of the income said penalty proceedings is being initiated. Second aspect is that, as held by this Court, sending of printed form wherein the grounds mentioned in Section 271 of the Act would not satisfy the requirement of law. The third aspect for which the observations are made by this Court is that, the assessee should know the ground which he has to meet specifically otherwise the principles of natural justice would be violated and consequently, no penalty could be imposed on the assessee if there is no specific ground mentioned in the notice. No specific ground is mentioned in the subject notice and resultantly the principles of natural justice could be said as violated. 10. In our view, if the observations made by this Court in the above referred decision and more particularly clauses (p), (q) and (r) are considered, it was a case wherein the decision of this Court would apply and it cannot be said that the decision of this Court in the ....