TaxTMI 
TaxTMI 
2017 (11) TMI 1762
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....that the appellant had not concealed any particular of income or furnished any inaccurate particulars. Hence, the levy of concealment of penalty of Rs. 4,63,500/- u/s 271(1)(c) is without any basis and the same may be deleted. 3. Briefly stated, the facts of the case are that the assessee-company filed its return of income for the AY 2008-09 on 09.07.2008 declaring total income of Rs. 11,49,410/-. During the course of assessment proceedings, the Assessing Officer (AO) was informed by the investigation Unit-I, Mumbai that a search and seizure action u/s 132 was conducted by the Revenue in the case of M/s Mahasagar Securities Pvt. Ltd. (now Alag Securities Pvt. Ltd.). During the course of search, it was revealed that M/s Mahasagar Securities Pvt. Ltd. and its related group of around 36 companies run by Mr. Mukesh Choksi were not engaged in any genuine business but involved in fraudulent billing activities and providing bogus speculation profit/loss, short term capital gains/loss, share application money, profit/loss on commodity trading (through MCX). It was further revealed that the assessee-company had given share application money of Rs. 5,00,000/- from M/s Jai hind Syntetics L....
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....assessee. Thus the Ld. CIT(A) upheld the penalty of Rs. 4,63,500/- levied by the AO. 6. The assessee has filed an additional ground before the Tribunal. "The Ld. CIT(A) as well as the Ld. AO failed to appreciate that the notice dated 22.03.2013 issued u/s 274 r.w.s. 271 of the Income Tax Act, 1961 is not discernable as to whether the penalty proceedings is initiated for concealment of income or furnishing of inaccurate particulars of income. Hence, the notice dated 22.03.2013 u/s 274 r.w.s. 271 of the Act and the subsequent penalty order u/s 271(1)(c) of the Act is bad in law and the same may be quashed." 6.1 We are of the considered view that the above additional ground raised by the assessee is purely a legal ground and the same goes to the root of the instant case. In view of the ratio laid down in NTPC vs. CIT (1998) 229 ITR 383 (SC), we admit the above additional ground filed by the assessee. 7. Now we consider the merit of the additional ground filed by the assessee. We find that in the assessment order dated 22.03.2013 completed u/s 143(3) r.w.s. 147, the AO has initiated the penalty proceedings u/s 271(1)(c) on the ground that the assessee has furnished in....
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....l for consideration in the matter and no one aspect would be decisive. In this context, useful reference may be made to the following observation in the case of CIT v. Mithila Motor's (P.) Ltd. [1984] 149 ITR 751 (Patna) (head note): Under section 274 of the Income-tax Act, 1961, all that is required is that the assessee should be given an opportunity to show cause. No statutory notice has been prescribed in this behalf. Hence, it is sufficient if the assessee was aware of the charges he had to meet and was given an opportunity of being heard. A mistake in the notice would not invalidate penalty proceedings." 7.3 In CIT vs. Samson Perincherry (ITA No. 953, 1097, 1154 & 1226 of 2014), the Hon'ble Bombay High Court held: "Therefore, the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned under Section 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/permit penalty being imposed for the order breach. This is more so, as an Assessee would respond to the ground on which the penalty has been initiated/notice issued. It must, therefore, follow that the order imposing penalty has to be made only on....
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.... (ii) the AO issued notice u/s 148 on 21.02.2012, (iii) the assessee filed an affidavit on 20.03.2013 offering Rs. 15,00,000/- to tax and (iv) the AO complete the assessment on 22.03.2013 making an addition of Rs. 15,00,000/- to the income shown by the assessee. 11.1 The background as delineated hereinbefore is that during the course of search and seizure action u/s 132 conducted in the case of M/s Mahasagar Securities Pvt. Ltd., it was revealed that these were fraudulent transactions. This led the assessee-company to offer Rs. 15,00,000/- to tax by filing an affidavit before the AO on 20.03.2013. Therefore, the submission of the Ld. counsel of the assessee delineated at para 9 hereinbefore loses its significance. 11.2 Where the assessee himself voluntarily concedes that a particular item of income had been concealed by him and surrenders such income for the purpose of assessment, there is nothing left for the Revenue to prove the factum of it being assessee's income and also the factum of it having been concealed by him. In such cases, such concession by the assessee may afford sound foundation for the imposition of penalty. A plethora of precedents on the subject in which w....