TaxTMI 
TaxTMI 
2017 (11) TMI 1048
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....Act"). 2. The assessee in the present appeal is in second round of litigation before the Tribunal. Earlier, the assessee had filed appeal in I. T. A. No. 886/Pun/2006 assailing the levy of penalty under section 271(1)(c) of the Act on the addition of Rs. 3,90,51,618. The Tribunal vide order dated June 22, 2011 set aside the impugned order and remitted the matter back to the file of the Assessing Officer for fresh adjudication. The Assessing Officer in proceedings giving effect to the order of the Tribunal again levied penalty of Rs. 1.40 crores on concealed income of Rs. 3,90,51,618. Aggrieved by the order dated March 28, 2013 passed under section 271(1)(c) read with section 254, the assessee filed an appeal before the Commissioner of....
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....ccurate particulars of income. Thereafter, notice under section 274 read with section 271(1)(c) was issued on January 23, 2001 wherein it has been mentioned that the assessee has concealed particulars of income or furnished inaccurate particulars of income. The irrelevant limb or the charge has not been deleted by the Assessing Officer while issuing notice. The learned authorised representative pointed that while recording satisfaction the Assessing Officer has used the word "and" to mention both the charges for the levy of penalty as envisaged under section 271(1)(c) of the Act. Whereas in the notice, both the charges for levy of penalty under section 271(1)(c) are mentioned with the word "or". Thereafter, while levying penalty the Assessi....
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....nd Shri Ajay Modi representing the Department vehemently defended the impugned order. The learned Departmental representative submitted that the Assessing Officer while recording satisfaction has invoked both the limbs for the levy of penalty as the assessee intentionally filed inaccurate particulars of income resulting into concealment of income within the meaning of section 271(1)(c) of the Act. The learned Departmental representative prayed for rejecting the additional ground raised by the assessee challenging the validity of notice. 5. We have heard the submissions made by the representatives of rival sides and have perused the orders of the authorities below. The assessee in grounds of appeal has assailed the levy of penalty under s....
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....d that the assessee has defaulted within the meaning of section 271(1)(c) read with Explanation 1 of the Income-tax Act, 1961 without any reasonable cause. The penalty of Rs. 1,40,00,000 is levied as against the maximum penalty of Rs. 4,09,92,196." 8. A perusal of the satisfaction recorded for initiating penalty proceedings, the reasons for the levy of penalty mentioned in the notice and the reason given in the order levying penalty under section 271(1)(c) are not coherent. While recording reasons for initiating penalty proceedings and thereafter at the time of issuance of notice for levy of penalty vagueness and ambiguity in the mind of the Assessing Officer with respect to charge for the levy of penalty appears writ large. The Assessin....
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....d in section 271(1)(c) when it is a sine qua 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 the 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 j....