TaxTMI 
TaxTMI 
2017 (11) TMI 1055
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....CIT(A)'], erred in confirming penalty of Rs. 52,94,165 imposed by the Deputy Commissioner of Income-tax - 1(3)(1) ('the learned AO') under section 271(1)(c) of the Income-tax Act, 1961 ('the Act'). The Appellant prays that the learned AO be directed to delete the penalty of Rs. 52, 94,165. Ground No.2: Without prejudice to above Ground No.1, on the facts and in the circumstances of the case and in law, the learned C1T(A) erred in confirming penalty of Rs. 26,47,083 imposed by the learned AO in respect of addition of Rs. 2,50,67,068 on which the taxes were duly deducted and paid in terms of Section 195 read with Section 199 of the Act. The Appellant prays that the learned AO be directed to delete the penalty of Rs.....
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....bove. Ground Nos 1 to 2. 5. Since all theg rounds raised by the assessee are inter-connected and inter-related therefore we thought it fit to dispose of the same through the present common order. 6. Ld. AR apart from addressing the arguments on merits had also challenged the legality of the notice issued under section 274 r.w.s. 271 of the Act for initiating of the penalty proceedings under section 271(1)(c) of the Act for A.Y. 2011-12. A perusal of the notice issued under section 274 r.w.s. 271 of the Act(copy placed at paper book-21-22) reveals that the AO has not deleted the inappropriate words and parts of the notice, whereby it is not clear as to the default committed by the assessee, i.e. whether it is concealment of particul....
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....imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay 6 ITA No.7602/Mum/2014(AY-2005-06) TCFC Finance Ltd. penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Sec....
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....n 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 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 7 ITA No.7602/Mum/2014(AY-2005-06) TCFC ....
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....ereof are as under: "63 ..................................... a) ..................................... p)Notice under section 274 of the Act should specifically state the ground mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. q)Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on the limb and finding the assessee gu....