TaxTMI 
TaxTMI 
2018 (4) TMI 448
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....rounds of appeal before or at the time of hearing." Shri G.Hanshing, Ld. Departmental Representative appeared on behalf of Revenue and Shri A.K. Tibrewal, Ld. Authorized Representative appeared on behalf of assessee. 2. The issue raised by the Revenue in this appeal is that ld. CIT(A) erred in deleting the penalty levied by the AO under section 271(1)(c) of the Act. 3. The facts and circumstances under which penalty u/s 271(1)(c) of the Act was levied on the assessee by the Assessing Officer are that the assessee is a limited company and filed its return of income declaring taxable income u/s 139 of the Act of Rs. 14,69,39,472.00 only. Subsequently a search operation was conducted upon the assessee u/s 132 of the Act on 04.10.2012 and accordingly the return was filed u/s 153A of the Act on 19.07.2014 declaring total income of Rs. 15,10,31,620.00 only. The taxable income declared in the return filed u/s 153A of the Act was accepted in the assessment framed u/s 153A/143(3) of the Act vide order dated 27.03.2015. The income declared in the return filed u/s 153A of the Act was more than the income declared in the return filed u/s 139 of the Act. The reasons for the enhanced in....
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....explanation in respect of the quantum of penalty proposed to be imposed, as has been urged....." It further observed that "16. It is not in dispute that a reasonable opportunity of being heard in the matter as required by Section 274 of the said Act was given to the assessee before imposing the penalty by the I.T. Officer." Further, the ITAT Mumbai Bench in the case of Earthmoving Equipment Services Corporation v.s DCIT 22(2) Mumbai (2017) 84 taxmann.com 51 opined that after perusing the ratio of the judgment rendered in Manjunatha Cotton and Ginning Factory we find that the assessee's appeal was allowed by the Hon'ble High Court after considering the multiple factors and not solely on the basis of defect in Notice u/s. 274. Therefore we are of the opinion that the penalty could not be deleted merely on the basis of defect pointed by the Ld.AR in the notice and therefore the legal ground raised are rejected. He further submitted that service of notice u/s. 274 for initiating penalty proceeding u/s. 271(1)(c) of the Act would constitute valid initiation of penalty proceedings and the case may be decided on merits. He vehemently relied on the order of AO. 5. On the other hand ....
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....eady observed that the show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. 6.1 We also find that in the identical facts & circumstances the Co-ordinate Bench of this Tribunal in the case of Nishith Kumar Jain Vs. ACIT in ITA 961- 964/Kol/2013 has decided the issue in favour of assessee vide order dated 10-2-2016. The relevant extract of the order is reproduced below : 9. We have considered the rival submissions. The argument of the learned counsel for the Assessee was that the show cause notice u/s.274 of the Act which is in a printed form and the AO has indicated in the said notice as to whether the penalty is sought to be levied on the assessee for "furnishing inaccurate particulars of incom....
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....hich they intend 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 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 Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may b....
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....alment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the 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 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." The final conclusion of the Hon'ble Court was as follows:- "63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulate....
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....o initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds 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 one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concea....