TaxTMI 
TaxTMI 
TaxTMI 
2016 (2) TMI 1130
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....support of this, assessee has filed a copy of the notice dt. 16.12.2011, issued u/s.274 r.w.s.271 (1)(c) of the Act. 03. Per contra, Ld. DR submitted that assessee had not raised any ground before the CIT (A) assailing the validity of the notice issued u/s.274 r.w.s.271 of the Act. As per the Ld. DR, levy of penalty for the impugned assessment year was for concealment of income. Ld. DR submitted that even in a revised return filed by the assessee, assessee had failed to disclose the correct income. Thus there was clear concealment of income. Ld. DR submitted that though assessee had carried the issue of additions in appeal and had got considerable relief from this Tribunal, the factum of concealment and furnishing of inaccurate particulars....
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..../s. Manjunatha Cotton & Ginning Factory (359 ITR 565) held as under at paras 15 to 17 : "15. The first legal question is whether the notice u/s 274 r.w.s.271 is valid. The learned DR's objection is that the assessee has not raised any specific ground of appeal on this issue. However, we find in the ground of appeal no.2, the assesssee has raised an objection that the order of penalty passed by the ld.AO u/s271(1) of the IT Act, is without jurisdiction as the mandatory condition for invoking provision of sec.271(1)(c ) of the Act has not been compiled with. Therefore, we have to examine whether mandatory conditions for initiating the proceedings u/s 271(1)(c ) were complied with or not. What are the mandatory conditions for invoking the pr....
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....s 274 has to come to the conclusion as to whether it is case of concealment of income or it is a case of furnishing of inaccurate particulars of income and if the standard proforma without deleting the relevant clause is issued, it leads to an inference as to non-application of mind by the AO. The relevant portion of the Honble High Court's order is reproduced hereunder: "59. As the provision stands, the penalty proceedings can be initiated on various grounds set out therein. If the order passed by the authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued u/s 274, the could conveniently refer to the said order which con....
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....of income or furnishing inaccurate particulars of income. No doubt, the facts f the some cases may attract both the offences and is some cases there may be overlapping of the two offences but in such cases the initiation 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 of finding him guilty for either the one or the other cannot be sustained in law. It is needless to pint satisfaction of the existence of the grounds mentioned in sec.271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confirmed only to those grounds and the said grounds have to be specifically stated to that the ....
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....s, the A 0 while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at pages 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat Court in the case of Manu Engineering reported in 122 ITR 306 and the be Delhi High Court in the case of Virgo Marketing reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the AO proposes to invoke the first limb concealment, then the notice h....