2019 (1) TMI 595

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....9.05.2014 framed by ITO-1(2), Bhopal. 2. The assessee has raised following grounds of appeal; "1. That in the facts and circumstances of the case, the Ld. CIT(A) erred in confirming levy of penalty of Rs. 5,00,000/- u/s 271(1)(c) of the Act. 2. That the order of penalty passed by the A.O and sustained by CIT(A) is bad in law and ought to be set aside." ADDITIONAL GROUNDS OF APPEAL 3. That the learned AO erred in issuance of notice us/ 271(1)(c) without there being any satisfaction of the AO as to on which limb penalty proceedings are initiated. Blanket penalty proceedings so initiated being illegal and wrong, the penalty require to be cancelled. 4. That the learned AO erred in imposing penalty of Rs. 5....

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....t. As the assessee retracted and did not accepted his declaration, the case taken for scrutiny and notice u/s 143(2) was issued on 11.09.2008. The income of Rs. 24,78,068/- assessed u/s 143(3) adding excess stock at Rs. 15,15,430/- rent at Rs. 1,25,632/-, stock difference at Rs. 2,99,325 and expenses at Rs. 10,000/-. Penalty u/s 271(1)(c) of the Act of Rs. 5,00,000/- was levied for furnishing inaccurate particulars/concealed particulars of income. Aggrieved assessee preferred appeal before Ld. CIT(A) against the penalty levied u/s 271(1)(c) at Rs. 5,00,000/- but could not succeed. 4. Now the assessee is in appeal before us. 5. Ld. Counsel for the assessee submitted that the Ld.AO in order U/S 143(3) dated 31.12.09 initiated the penalt....

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....illegal and wrong. Merely because the AO is not satisfied about the explanation, no penalty is leviable. For this proposition reliance is placed on following decisions:- (i) CIT vs. Reliance Petroproducts P. Ltd. 322 ITR 0158(SC) (ii) T. Ashok Pai vs. CIT 292 ITR 0011 (SC) (iii) Bhagirath Prasad Bilgaiya vs. CIT 139 ITR 0902 (MP) (iv) CIT vs. S.M. Construction (ITA No.412/2013)(Mumbai HC) (v) CIT vs. Gem Granites 86 CCH 0160(Chennai HC) (vi) CIT vs. Agrawal Round Rolling Mills Ltd. 88 CCH 0036(SC) (vii)CIT vs. Manjunath Cotton & Ginning Factory 83 CCH 0282 (Karnataka HC) (viii) National Thermal Power Co. Ltd V/s CIT (1999) 157 CTR 0249. (ix) Principal Commissio....

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....imb i.e. for concealment of particulars of income or for furnishing inaccurate particulars of income, penalty proceeding have been initiated. 10. In view of the judgment of Hon'ble Apex Court in the case of National Thermal Power Co. Ltd (supra) , we have admitted this legal ground for adjudication and are proceeding to deal with the same. 11. It is an established position of law that the Ld.A.O at the time of issuing notice u/s 274 r.w.s. 271(1)(c) of the Act has to give positive and clear cut finding in the body of the show cause notice itself reflecting the charges against the assessee as to whether penalty proceeding are initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. To e....

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....d 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". 14. Similarly in the case of CIT V/s Manjunatha Ginning Factory, ....