TaxTMI 
TaxTMI 
2016 (8) TMI 1158
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....2. The only issue in this appeal of assessee is against the order of the CIT(A) confirming the levy of penalty u/s. 271(1)(c) of the Act for concealment of income on the issue of adjustment of stock value of plot of land. 3. Briefly stated the facts of the case are that the assessee is engaged in the business of buying and selling of land. The AO during the course of assessment proceedings noticed that the assessee has sold one plot 1096 at Adgaon at a loss of Rs. 6,65,800/-. Similarly, loss in plot of Pathardi 311/1a was incurred at Rs. 21,08,290/-. According to the AO, the land transactions are negatively shown whereas price of land always appreciates and never reduces. The assessee himself submitted a revised computation of income. On q....
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..... Counsel the AO himself is not convinced about the charge. The ld. counsel for the assessee drew my attention to the pages 2-3 of the assessee's paper book, wherein penalty notice u/s. 271(1)( c) r.w.s 274 of the Act dated 17-11-2011 was issued by the AO to the assessee. The ld. counsel for the assessee stated before me that this issue is covered in favour of the assessee by the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Kar.). I find that the notice issued u/s. 274 r. w. s. 271 of the Act, dated 17-112011, clearly reveals that the AO while issuing the notice has not strike off inappropriate words and accordingly, the purpose of the notice issued for levy of....
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....ld not arise. It may be a case of not disclosing income without any intent to avoid tax; it may be a case of furnishing particulars without any intention to avoiding tax. Both stand on the same footing. It is only when the authority is satisfied that non-disclosure of income or furnishing inaccurate particulars was with the intention of evading tax, then it amount to concealment, it amounts to furnishing inaccurate particulars. Then, at his discretion, he may impose penalty as provided under the Act. Therefore, merely because the assessee accepted addition or deletion and did not challenge the assessment order by way of appeal, it cannot be concluded that such addition or deletion amounts to concealment of income or furnishing of inaccurate....
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....e to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned 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 ....
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....e 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,....