TaxTMI 
TaxTMI 
2017 (5) TMI 1306
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....Grounds of appeal: The learned CIT(A) has erred in law and facts in confirming penalty u/s. 271(1)(c) of Rs. 10,110/-. The penalty needs deletion. 3. The relevant facts as culled out from the materials on record are as under:- During the course of scrutiny of assessment proceeding for A.Y. 2011-12, the assessee was asked to furnish the details of all the bank accounts and copies of Bank statements. The assessee reported that he has two saving bank accounts. One (A/c No.30099480512) with State Bank of India, Jawahar Road Branch, Rajkot and another (A/c. No. 013003100005771) with Rajkot Nagrik Sahakari Bank Ltd., Junction Plot Branch, Rajkot. On verification of bank statements, it was noticed that assessee had some cash deposits in t....
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....on of the section 271(1) was clearly attracted. 5. In view of the reason mentioned above and in assessment order, the learned AO has levied of penalty of Rs. 30,327/- under section 271(1)(c) for concealment of income. 6. Against the said order assessee preferred appeal before the learned CIT(A) who had dismissed the appeal of the assessee. 7. Now assessee's appeal has come before us. During the course of appellate proceedings the learned Counsel submitted paper book and contended that the notice u/s. 274 r.w.s. 271(1)(c) of the Act dated 31/12/2013 is invalid as the notice does not specify as to whether it is issued for concealing the particulars of income or furnishing inaccurate particulars of income. He has also placed reliance ....
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....ng the particulars of income or furnishing inaccurate particulars of such income. We have further noticed that the co-ordinate Bench of the ITAT has decided the identical issue in the case of Shree Khodsal Steel Ltd. vs. ACIT, Rajkot vide ITA No.738/Rjt/2014 by observing as under: "10.1 From the perusal of the above findings it is crystal clear that penalty proceedings were initiated on either of the two reasons whereas penalty order shows that assessee was guilty for both the reasons i.e concealment of particulars of income and furnishing inaccurate particulars of income. We further observe that similar issues dealing with the legality of notice u/s.274 w r.w.s 271(1)(c) of the Act have been adjudicated by the Co-ordinate Bench in the c....
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....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 imposed on the same ground. Where the basis of the initi....
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....r reads that penalty proceedings were initiated for furnishing inaccurate particulars of income, whereas the penalty order shows that the assessee was guilty of concealment of particulars of income/furnishing inaccurate particulars of income. According to the binding precedents referred to above, such a course is bad in law and cannot be sustained. We, therefore, proceed to quash the penalty proceedings as they cannot be sustained under law.'' 10.2 Similarly in another decision of Co-ordinate Bench in the case of Shri Paras Kumar V Kataria Vs. ITO, Ward-1(3), Rajkot, it was observed as follows: "16. We have carefully considered rival submissions. At the outset, we take note of the legal arguments raised on behalf of the assessee....