TaxTMI 
TaxTMI 
2017 (11) TMI 500
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....ce of depreciation on the property of Rs. 21,10,707/- in respect of newly purchased property. 2. The brief facts qua the issue relating to levy of penalty are that, the assessee has claimed depreciation expenses of Rs. 44,88,410/- out of which Rs. 13,25,000/- and Rs. 24,72,000/- relates to the depreciation on newly purchased properties at K-4, South Extension- II, New Delhi and Flat No. 51, 52 and 53, Park West Society, Plot No. 5-6, Union Park, Mumbai. The Assessing Officer in the course of the assessment proceedings asked the assessee to submit documentary evidences regarding purchase of these properties. The Assessing Officer on close scrutiny of purchase deeds filed by the assessee noted that the price of the properties also included c....
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....furnishing of inaccurate particulars of income or for concealment of the particulars of the income. He first of all drew our attention to assessment order dated 26.2.2013 and pointed out that Assessing Officer has mentioned that "penalty proceedings u/s 271(1)(c) of the Income Tax Act 1961 has been initiated separately for concealing the particulars of income and furnishing inaccurate particulars of income". In the notice issued u/s 274 read with section 271 dated 26.2.2013, the Ld. Assessing Officer has not stroked off the inapplicable clause, i.e., whether the initiation is for concealment of the particulars of the income or for furnishing of inaccurate particulars. Finally in the penalty order, the penalty has been levied by the Assessin....
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....ed assessment order dated 26.2.2013, we find that the Assessing Officer has tried to initiate the penalty proceedings under both the charges, i.e., for "concealing the particulars of income" and for "furnishing of inaccurate particulars of the income". In the notice issued u/s 274 r.w.s. 271(1)(c), the Assessing Officer has not specified the charge under which he proposes to initiate the penalty u/s 271(1)(c), that is, he did not specify under which limb of the said section he intends to initiate the penalty proceedings. The Assessing Officer has not striked off the inapplicable clause in the said notice. Section 271(1)(c) envisages levy of penalty on two distinct limbs, i.e., when the Assessing Officer in the course of any proceedings is s....
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....proceedings is initiated, in the notice 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....
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....a 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 p....
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....lear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." 6. This judgment of the Hon'ble Karnataka High Court reported by the same court in the case of CIT vs. M/s. SSA'S Emerald Meadows in ITA No. 380/2015 order dated 23.3.2015 and also in the case of Safina Hotels (P) Ltd. vs. CIT (2016) 137 DTR 0089, Hon'ble Karnataka High Court. 7. The Hon'ble Delhi High Court in the case of CIT vs. Virgo Marketing Pvt. Ltd. reported in 2....