2017 (3) TMI 1538

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e involved in both the appeals is one and the same, these two appeals are disposed of by this common order with reference to the facts relating to Assessment Year 2004-05. 3. The brief facts of the case are that assessee is an individual deriving income from M/s. Ganesh Soap & Chemical Industries, Veraval, Rajkot and during the assessment year in the course of assessment proceedings u/s 144 of the Income Tax Act, 1961 (for short hereinafter referred to as "the Act"), the Assessing Officer found that assessee had furnished inaccurate particulars of his income, as such initiated penalty proceedings for such charge u/s 271(1)(c) of the Act. After issuing notice and hearing the assessee, the Assessing Officer found that the explanation of asse....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....TR 502 (Kar) ix) CIT vs Jyoti Ltd., [2013] 34 taxmann.com 65 (Gujarat) 5. Per contra, it is the argument of the ld. DR that in para 2 of the penalty order as well as in para 5 thereof, it is clearly stated that the penalty is proposed only for furnishing of inaccurate particulars of income, as such, merely because at a later stage the Assessing Officer stated that the assessee has furnished inaccurate particulars of his income and also concealed the particulars of his income it has no consequence at all, as such prayed to uphold the order of the authorities below. 6. We have carefully perused the material papers on record in the light of the statements made on behalf of the assessee including the judgment relied upon by him in the case ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....d 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 initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable." This was followed by the Hon'ble Karnataka High Court in the decis....