TaxTMI 
TaxTMI 
TaxTMI 
2018 (6) TMI 961
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....(A) erred on facts and in law in not appreciating that satisfaction qua items in respect of which penalty has been levied, is not discernable from the assessment order, which is sine qua non for assumption of jurisdiction for levying penalty under section 271 (1)( c) of the Act. 1.3 That the CIT (Appeals) erred in not appreciating that the penalty imposed without issuance and/ or service of a valid notice to the appellant, is illegal and bad in law. 1.4 That the CIT(A) erred in not appreciating that the assessing officer proceeded to pass the impugned penalty order in undue haste, without affording adequate opportunity of being heard to the appellant, in gross violation of principles of natural justice. Without prejudice: 3. That the CIT(A) erred on facts and in law in not deleting penalty of Rs. 12,90,00,000 levied under section 271(1)(c) of the Act vide impugned penalty order dated 30.01.2015, which was levied simply on the basis of findings in the quantum proceedings. 3. That the CIT(A) erred in confirming penalty levied under section 271 (1)(c) of the Act in respect of denial of claim regarding exclusion of AED credit amounting to Rs. 25.47 crores while computing....
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....e true particulars of income qua all the additions vide notice dated 13.12.2010 issued u/s 274 read with section 271(1)(c) and during the appeal before the ld. CIT (A), addition of Rs. 20,41,64,000/- on account of disallowance of business expenses has been deleted whereas the remaining additions have been confirmed. AO issued notice dated 16.01.2015 calling upon the assessee as to why penalty under section 271(1)(c) be not imposed on the addition made by the AO. Assessee opposed the penalty proceedings on ground of limitation in terms of proviso to clause (a) of section 275(1) of the Act. However, declining the contentions raised by the assessee, AO proceeded to levy the penalty of Rs. 12,90,00,000/- under section 271(1)(c) of the Act on account of deliberately furnishing inaccurate particulars of income. 3. Assessee carried the matter by way of appeal before the ld. CIT (A) who has confirmed the penalty. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeal. 4. We have heard the ld. Authorized Representatives of the parties to the appeal, gone through the documents relied upon and orders passed by the revenue authorities below in the....
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....d before the expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, are completed, or within one year from the end of the financial year in which the order of the Commissioner (Appeals) is received by the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner, whichever is later." 8. Undisputedly, the CIT (A) has passed the order in the instant case on 26.10.2012. It is also not in dispute that the penalty order was passed on 30.01.2015. It is also not in dispute that the limitation issue was also raised by the assessee before the ld. CIT (A) who has decided the same with one line order, "penalty order was passed within time prescribed in the proviso to section 275 (1)(a) of the Act without going into the provisions." 9. Bare perusal of the provisions contained u/s 275(1)(a) of the Act goes to prove that the AO was obligated to levy the penalty within one year from the end of the financial year in which order dated 26.10.2012 passed by ld. CIT (A) was received. More so, in case of penalty on account of disallowance of long term capital loss, no appeal was filed by th....
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.... on or before the said date which will be considered before any such order is made under section 271(1)(c). Sd/- Assessing Officer A.S.MEHRA Assistant Commissioner of Income Tax, Circle 5 (1), New Delhi. Delete inappropriate words and paragraphs" 13. Bare perusal of the notice issued u/s 274 read with section 271(1)(c) of the Act in order to initiate penalty proceedings against the assessee goes to prove that the AO himself was not aware as to whether he is issuing notice to initiate the penalty proceedings either for "concealment of particulars of income" or "furnishing of inaccurate particulars of such income" by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him, he/she should be specifically made aware of the charges to be leveled against him/her. 14. Hon'ble High Court of Karnataka in case of CIT vs. Manjunath Cotton and Ginning Factory (supra) while deciding the identical issue held that when the AO has failed to issue a specific show-cause notice to the assessee as required u/s 274 read with section 27....
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....offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned 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 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 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 ....
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....ued by Assessing Officer under section 274 read with section 271 (1 )(c) was bad in law, as it did not specify under which limb of section 271 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by revenue, same was liable to be dismissed - Held, yes [Para 2] [In favour of assessee]" 16. Aforesaid decisions rendered by Hon'ble Apex Court in CIT vs. SSA's Emerala Meadows (supra) and Hon'ble Karnataka High Court in CIT vs. Manjunath Cotton and Ginning Factory (supra) are squarely applicable to the facts and circumstances of the case as the AO has miserably failed to specify in the notice issued under section 274 read with 271(1)(c) of the Act, "as to whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income", so in these circumstances, penalty levied by the AO and confirmed by ld. CIT (A) is not sustainable in th....
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....nsidered the same and imposed the penalty thereon. 20. Hon'ble Delhi High Court while deciding the identical issue in case of Devsons (P.) Ltd. vs. CIT - (2010) 329 ITR 483 (Delhi) held that "in case the assessee has disclosed each and every fact to the departmental authorities or to Court concerned, then merely because departmental authorities concerned or High Court concerned does not concur with legal stand adopted by assessee, it will not be enough reason to hold that assessee is guilty of concealment of income or of furnishing inaccurate details - Held, yes" 21. Hon'ble Apex Court in CIT vs. Onkar Saran & Sons - (1992) 195 ITR 1 (SC) also decided identical issue in favour of the assessee as under :- "Penalty - For concealment of income - Assessment years 1961- 62 and 1962-63 - Whether even in a case where a return filed under section 148 involved an element of concealment, law applicable for imposition of penalty would be law as in force at time of original return filed for the assessment year in question and not law as it stood on dates on which returns in response to the notice under section 148 were filed - Held, yes." 22. So, in view of the law laid down by Hon'ble A....