2018 (11) TMI 1548

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....o law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The learned CIT[A] is not justified in upholding the penalty of Rs. 26,37,567/- levied u/s. of the Act in respect of the estimated the income of the appellant from contract business at 8% under the facts and in circumstances Of the appellant's Case. 3. The learned CIT[A] failed to appreciate that the appellant has neither concealed any income nor furnished inaccurate particulars of income in respect of the above addition made to warrant levy of penalty and therefore, the penalty levied u/s.271 of the Act requires to be cancelled. 4. Without prejudice to the above, the penalty levied is highly excessive and liable to be reduced substantially. 5. For the above and other grounds that may be urged at the time Of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 2.2 Subsequently, the assessee filed additional ground Nos.1 & 2 which is extracted hereunder :- 1 . The order of penalty passed u/s ....

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.... Court in the case of Manjunatha Cotton & Ginning Factory (359 ITR 565) (Kar) and the rejection of the Revenue's SLP by the Hon'ble Apex Court in the case of SSAS Emerald Meadows in SLP: (CC 11485/2016) dated 5/8/2016. The ld AR also placed reliance on the decision of the coordinate bench of this Tribunal in the following cases of - (i) C Ramaiah Reddy in ITA No.977/Bang/2017 dated 22/9/2017. (ii) Arun Kumar in ITA No.117/Bang/2016 dated 16/12/2106 and (iii) A. Nagaraju in ITA No.2196/Bang/2016 dt.6.4.2018 in support of the assessee's case. It is contended that in similar circumstances, as in the case on hand, the co-ordinate benches of this Tribunal have held that the penalty proceedings initiated on the basis of defective notice has to be cancelled. 3.2 Per contra, the ld DR for Revenue supported the orders of the authorities below. The learned Departmental Representative relied on the decision of the co-ordinate bench of this Tribunal in the case of P.M. Abdullah Vs. ITO in ITA No.1223 & 1224/Bang/2012 dt.17.10.2016, wherein the Bench held that the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory (supra) was rendered w....

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....rned from the said order and if it is a case of relying on deeming provision contained in Explanation-I or in Explanation- l(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 oil 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(I)(c) c/a 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 tax liability. As the said provisions have to be held to be standby construed notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if th....

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....lment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of M4NU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO IvL4RKETING reported in 171 Taxman 156, has held that penalty has to be clear as to the limb for which it is levied and theaction 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 relevant1 clauses will lead to an inference as to non-application of mind." 3.3.3 The aforesaid view taken by the Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory (Supra) was....