TaxTMI 
TaxTMI 
2019 (2) TMI 269
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.... "1. The order of the Ld. Commissioner of Income 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. ....
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....per book filed by the assessee and he pointed out that as per this notice, the AO has not made it clear as to whether 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 da....
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.... AO is bad in law and penalty is not sustainable. She placed reliance on a judgment of Hon'ble Allahabad High Court rendered 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 a....
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.... 135 to 137 of paper book. "CONCLUSION 63. In the light of what is stated above, what emerges is as under: a) Penalty under 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....
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.... the assessee fails to prove that the explanation offered is not bonafide, an order imposing penalty could be passed. m) If the explanation offered, even though not substantiated by the assessee, but is found to be bonafide and all 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 ini....
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....s." 7. From the above conclusion of Hon'ble Karnataka High Court, it is seen that it was held in this case that notice u/s. 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 particulars of income 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. Hen....