TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 269
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....come Tax (Appeals)("CIT(A)") is opposed to law, facts and circumstances of the case. 2. The order is passed in haste, without providing sufficient and reasonable opportunity of being heard. 3. The order is passed against the principle of natural justice and thus liable to be quashed. 4. On the facts and circumstances of the case and in law, CIT(A) erred in confirming the action of AO of imposing penalty of Rs. 6,44,026/- u/s 271(1)(C) of the Income Tax Act, 1961. 5. On the facts and circumstances of the case and in law, the penalty of Rs. 6,44,026/-levied by the Ld. AO and confirmed by CIT(A) is not sustainable and is liable to be cancelled/deleted. 6. The Ld. AO has initiated the penalty proceedings under section 271(1) (c) of th....
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.... the allegation of the AO is regarding concealment of income or furnishing of inaccurate particulars of income. He placed reliance on the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Manjunatha Cotton & Ginning Factory as reported in 359 ITR 565 (Karnataka) in support of his contention that where the notice issued by the AO for levy of penalty does not specify the allegation, penalty order is bad in law and the same cannot be sustained. He also placed reliance on another judgement of Hon'ble Karnataka High Court rendered in the case of CIT Vs. SSA's Emerald Meadows in ITA No. 380 of 2015 dated 23.11.2015 copy available on pages 108 to 111 of paper book. He pointed out that in this case also, Hon'ble K....
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....ered in the case of U.P. Matsya Vikas Nigam Ltd. Vs. CIT as reported in [2014] 41 taxmann.com 447 (Allahabad) in support of the merit of the penalty imposed by the AO in the present case. 5. In the rejoinder, it was submitted by ld. AR of assessee that even as per penalty order passed by the AO in para no. 14 of the same, the AO has not made it clear as to whether he is imposing penalty for concealment of income or for furnishing of inaccurate particulars of income because the words used by the AO are "the assessee company has concealed its particulars of income / has furnished inaccurate particulars of income". He also placed reliance on a Tribunal order rendered in the case of HPCL Mittal Energy Ltd. Vs. Addl. CIT in ITA Nos. 554 & 555/A....
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....er Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Even if there is no specific finding regarding the existence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation 1(A) & (B) it should be discernible from the said order which wou....
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....l facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation 1B to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect parti....
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....ome and it was also held that sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law. It was also held by Hon'ble Karnataka High Court in this case that the assessee should know the grounds which he has to meet specifically and otherwise, principles of natural justice is offended and on the basis of such proceedings, no penalty could be imposed to the assessee. Hence it is seen that in the facts of present case and as per the judgement of Hon'ble Karnataka High Court, penalty order passed in the present case is bad in law because not only in the penalty notice but in penalty order also, the AO is not clear whether the allegation is regarding concealment of income or....