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TaxTMI 
TaxTMI 
TaxTMI 
2018 (12) TMI 1072
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....of the case and in law the penalty levied is uncalled for and bad in law and it is prayed that the penalty may very kindly be deleted. 2. That the Ld. CIT(A) erred in upholding the penalty levied u/s 271(1)(c) overlooking the fact that neither the requisite conditions as envisaged by law for the purpose of levying this penalty are present / fulfilled in this case nor the order imposing penalty u/s 271(l)(c) is a speaking order. 3. That the Learned CIT(A) erred in holding that the provisions of explanation 5A to section 271(1)(c) are applicable in this case. That on the facts and in the circumstances of the case the said observation is wrong and not in accordance with law. The Learned CIT (A) ought not to have confirmed the penalty. 4. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. Assessment Year 2009-10 "1. That the Ld. CIT(A) erred in upholding the action of the AO of levying penalty u/s 271(1)(c) of Rs. 6,00,000/- in respect of the additional income of Rs. 18,62,340/- declared by the appellant in the return of income filed in respo....
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.... penalty u/s 271(1)(c) of Rs. 6,00,000/- in respect of the additional income of Rs. 19,35,910/- declared by the appellant in the return of income filed in response to the notice issued u/s 153C. That on the facts and in the circumstances of the case and in law the penalty levied is uncalled for and bad in law and it is prayed that the penalty may very kindly be deleted. 2. That the Ld. CIT(A) erred in upholding the penalty levied u/s 271(1)(c) overlooking the fact that neither the requisite conditions as envisaged by law for the purpose of levying this penalty are present / fulfilled in this case nor the order imposing penalty u/s 271 (1)( c) is a speaking order. 3. That the Learned CIT(A) erred in holding that the provisions of explanation 5A to section 271 (1)( c) are applicable in this case. That on the facts and in the circumstances of the case the said observation is wrong and not in accordance with law. The Learned CIT(A) ought not to have confirmed the penalty. 4. That the appellant craves leave to add, to alter, amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. Assessment Year 2012-....
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...., amend, modify, substitute, delete and/or rescind all or any of the grounds of appeal on or before final hearing, if necessity so arises. 3. As the issues raised in these six appeals are common these were heard together and being disposed off by this common order for the sake of convenience and brevity. 4. Briefly stated facts as culled out from the records are that the assessee is an individual and was a partner in a partnership firm M/s Bio-Medics, till September 2012 and later became its proprietor. M/s Bio-Medics is engaged in trading of medical devices. Search and Seizure operations u/s 132 were carried out on the business as well as residential premises of CHL Group of Indore including the residential premises of the sons of the assessee along with other concerns/ business associates on 04.10.2013. Search warrant was in the name of the sons of the appellant namely Manoj Somani and Vinod Somani and not in the name of the appellant nor in the name of the erstwhile partnership concern M/s Biomedics. During the course of search proceedings at the residence of younger son Manoj Somani situated at 10 Sanghi Colony, Indore it was found that one bank account with Canara Bank A/c ....
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....to avoid any penal proceedings in this regard. Moreover, the said additional income was duly offered in the return filed in response to the notice issued u/s 153C for this year and relevant taxes were duly paid along with proper interest. Penalty proceedings were initiated in the assessment order in respect of additional income offered stating that the assessee has concealed its income and furnished inaccurate particulars. A notice u/s 274 was issued stating that the assessee has concealed the particulars of income or furnished inaccurate particulars of income. In response to the show cause notice dated 30.03.2016, a detailed reply was filed by the appellant inter alia pointing out that no specific charge was mentioned against the assessee. However, penalty was levied u/s 271(1)(c) vide order dated 28.09.2016 for A.Y. 2008-09 to 2013-14. Aggrieved by the said orders, the appellant filed appeals before Hon'ble CIT(A) which were dismissed vide order dated 21.08.2017 and the penalties levied were confirmed and now the assessee is in appeal before the Tribunal against the penalty confirmed by Ld.CIT(A) u/s 271(1)(c) of the Act. 5. We will first take up the common legal issue raise....
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....) Honourable ITAT Indore Bench in the case of Smt. Shruti Garg in IT A No. 988 to 1005/Ind/2016 vide order dated 28.06.2017. (vii) Keti Sangam Infrastructure (I) Ltd. And others ITA No 1343 & 601jIndj2016 dated 27.06.2018. (viii) Honourable ITAT, Indore Bench in the case of Gaurav Sharma v/s Assistant Commissioner of Income Tax in ITA No. 136 to 141/Ind/2017. 8. Ld. Counsel further submitted that similar view has been taken in the case of Principal CIT V/s Smt. Baisetty Revathi by Hon'ble Andhra High Court dated 13.07.2017 and also in the case of CIT V/s Shri Samson Perinchery by the Hon'ble Bombay High Court dated 05.01.2017 and also in many other cases by the Hon'ble Tribunal as well as the Hon'ble High Courts and some of the case laws are as under:- Case Court Date 2009-10 Sanjay Mittra vs DCIT, Central Circle- 26 (ITA No.5206/Del/2016) ITAT. Delhi 01-10-2018 2006-07 A.C.I.T Circle -17(1) vs Shri Haresh S Jhaveri (ITA NO.2561/MUM/2017) ITAT,Mumbai 28-09-2018 2011-12 Eon Aviation Pvt. Ltd., Mumbai vs DCIT 5(1), Mumbai (I.T.A No.3011/Mum/2016 ITAT,Mumbai 29-06-2018 2012-13 ITO, Ward-1, Berhampur vs Sri T.Biswanath Patro (ITA No.121/CTK/2017 ITAT, Cut....
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....alty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing or before the said date which will be considered before any such order is made under section 271(1)(c). Sd/- (Amit Kumar Soni) Asstt. Commissioner of Income Tax (Central)-1 Indore 11. Perusal of the show cause notice clearly makes visible the fact that the Ld. A.O while issuing the notice for initiating the penalty proceedings u/s 271(1)(c) has leveled both the charges against the assessee along with mentioning the word 'or in between'. It is not emanating out of the penalty notice that the addition to the income for which the penalty proceedings initiated comes under which category i.e whether the addition is for concealing the particulars of income or the addition is for furnishing inaccurate particulars of income. 12. In these given facts where the Ld. Assessing Officer has not striked off one of the limb provided u/s 271(1)(c) of the Act for the charge to be leveled against the assessee i.e. whether the penalty proceedings have been initi....
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....mmissioner of Income Tax v/s Kulwant Singh Bhatia dated 09.05.2018 (ITA 9 to 14 of 2018) has held that the penalty u/s 271(1)(c) of the Act of 1961 is not sustainable in law as the notice was not specific, observing as follows:- "on due consideration of the arguments of the Learned counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that Learned Tribunal has rightly relying on the decision of CIT V/s Manjunatha Cotton Ginning Factory and CIT V/s SSA'S Emerald Meadows rightly allowed the appeal of the assessee and set aside the order of penalty imposed by the authorities. No substantial question of law is arising in these appeals. ITA. No(s) 9/2018, 10/2018, 11/2018, 12/2018, 13/2018 and 14/2018, filed by the appellant have no merit and are hereby dismissed." 17. We observe that the facts of the case before the Hon'ble jurisdictional High Court in the case of Kulwant Singh Bhatia (supra) were almost identical in so far as additional income was offered by the assessee in the returns filed after the search on the basis of unexplained deposi....
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....leveled against the assessee is valid and tenable in the eyes of law needs to be examined. 14. We find that similar issue came up before the jurisdictional High Court in the case of Shri Kulwant Singh Bhatia (supra) wherein the Hon'ble Court discussed the judgment of Hon'ble High Court in the case of CIT V/s Manjunatha Cotton Ginning Factory (supra) and CIT V/s SSA's Emeralad Meadows (supra) held that "on due consideration of the arguments of the Ld. counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not specify the requirement of law, as notice was not specific, we are of the view that Ld. Tribunal has rightly allowed the appeal of the assessee and set aside the order of penalty enforced by the authority". 15. Similarly in the case of CIT V/s Manjunatha Ginning Factory, Hon'ble High Court of Karnataka held that "the notice issued u/s 274 r.w.s. 271(1)(c) of the Act should specifically mention the ground in section 271(1)(c) whether concealment of income or for furnishing in accurate particulars of income. Sending printed form where all ground of section 271(1)(c ) would not mentioned the specific requirement....