TaxTMI 
TaxTMI 
2016 (7) TMI 1226
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....w:- "1. The CIT(A), Central-I, Kolkata has erred in deleting the penalty u/s. 271(1)(c) imposed upon the assessee to the tune of Rs. 36,86,345/- by the AO. 2. On the facts and circumstances of the case and also in law, the CIT(A) has erred in deleting the penalty on the presumption that Explanation 5A to Sec. 271(1)(c) does not apply to assessment completed u/s. 153C of the IT Act. 3. On the facts and circumstances of the case and also in law, the CIT(A) is perverse in as much as it fails to take into account the express provisions of Sec. 153C(1) of the IT Act. 4. On the facts and circumstances of the case and also in law, the CIT(A) has erred in not appreciating the position of law that assessment under Sec. 153C is made in accordance with the provision of Sec. 153A and hence the Explanation 5A to Sec. 271(1)(c) squarely apply to the assessment completed under Sec. 153C. 5. On the facts and circumstances of the case and also in law, the CIT(A) has erred in deciding that there is no concealment as because there was no difference between the income returned under Sec. 153C and income assessed under Sec. 153C, whereas the Explanation 5A to Sec. 271(1)(c) has clarified that ....
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....nbsp; Navketan Enterprises 2008-09 399,700/- Cash final settlement 2008-09 100,000/- 2 Abha Vyapaar Pvt. Ltd Gayatri Mondal 2006-07 437,500/- Arun K. Bhoumik 2007-08 38,420/- 4 Bhavsagar Sales Pvt. Ltd Hari Das Mondal 2006-07 180,600/- 5 Jagran Marketing Pvt. Ltd. Hari Das Mondal 2006-07 525.000/- Arun Kr. Bhoumik 2007-08 38,775.00 6 Progressive Vyappar Pvt. Ltd. Hari Das Mondal 2006-07 437,500/- Arun Kr Bhoumik 2007-08 36,540/- 7 Sansakar Goods Pvt Ltd Hari Das Mondal 2006-07 525,000/- Arun Kr Bhoumik 2007-08 38,775/- 8 Cash 14,374,155/- Total 23,241,290/- From the above, it was clear that assessee has made total undisclosed investment for Rs.1,43,74,155/-. Out of the total undisclosed investment a sum of Rs. 1,09,14,155 was invested in the AY 2006-07 and balance of Rs. 34,60,000.00 was invested in the AY 2007-08. The assessee during the course of search proceedings u/s 132A of the Act has ....
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....ty levied by AO by observing as under:- i) The provision of Sec. 153A, 153B and 153C if read jointly then it shows that these provisions are complete course for such assessment where such penalty initiated after 31.03.2003. However, these provisions of the Act demand to exclude the normal assessment procedure as covered u/s 139/147/148, 149/151/153 of the Act. In this circumstances, L'd CIT(A) opined that there is no need to make reference to the provision as specified for filing return of income u/s. 139 of the Act for the purpose of imposition of penalty u/s 271(1)(c) of the Act. ii) The income offered in response to the notice issued u/s 153C of the Act was accepted by the Assessing Officer without making any addition. Therefore, there was no concealment of income as per the provisions of Explanation 5A to Sec. 271(1)(c) of the Act. iii) As per the provision of Explanation 5A to Sec. 271(1)(c), the penalty will be levied in case search was conducted upon the assessee u/s 132 of the Act, but in the present case, no search was initiated u/s. 132 of the Act. There is no question of levying the penalty under Explanation 5A to Sec. 271(1)(c) of the Act. In view of the above, L'd ....
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....h was subsequently deleted by Ld CIT(A) in appellate stage on the ground that there was no mismatch in the income of assessee which declared by assessee u/s. 153C of the Act and the assessee was not search party u/s 132 of the Act. Therefore, undisclosed income is out of the purview of the provisions specified under Explanation 5A to Sec. 271(1)(c) of the Act. Now the question, before us arise so as to whether the undisclosed income declared by assessee in pursuance to notice u/s. 153C of the Act is subject to penalty under Explanation 5A to Sec. 271(1)(c) of the Act in the aforesaid facts and circumstances. From the submission of assessee, we agree that name of assessee was nowhere recorded in the seized documents but assessee himself voluntarily came forward and offered the undisclosed income u/s. 147 of the Act. However, we do not agree with the findings of Ld CIT(A) that assessee was not searched u/s 132 of the Act, therefore, the provision of Explanation 5A to Sec. 271(1)(c) of the Act is not applicable to assessee. At this juncture, we would like to reproduce the provision of Explanation 5A to Sec. 271C which are reproduced as under :- "[271. Failure to furnish returns, comp....
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....u/s. 274 of the Act is silent about the charge under which penalty proceedings has been initiated whether it was initiated for concealment of income or for furnishing inaccurate particulars of income. On this basis, Hon'ble Karnataka High Court in the case of CIT & Anr. Vs. Manjunatha Cotton and Giniing Factory has laid down the following principles to be followed in the matter of imposing penalty u/s. 271(1)(c) of the Act. The Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Karn) (supra), 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 particulars of income. The Hon'ble High court has further laid down that certain printed form where all the grounds given in section 271 are given would not satisfy the requirement of law. The Court has also held that initiating penalty proceedings on one limb and find the assessee guilty in another limb is bad in law. It was submitted that in the present case, the aforesaid decision will squarely apply and all the orders imposing penalty have to be held as....
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....iation 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 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 impos....
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....nce 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 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,....