TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 365
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....A). iii) The Ld. CIT(A) has erred in law and facts of the case while confirming the penalty of Rs. 34,12,448/- holding that the assessee company has concealed the particulars of its income by furnishing inaccurate particulars thereof, whereas the facts remains that the assessee has disclosed all particulars of its income in the return of income filed before the revenue authorities. The said action of the Ld. CIT(A) is totally uncalled for and is untenable in law, hence, liable to be deleted in its entirety. iv) It is prayed that the aforesaid penalty so imposed be deleted. v) That the appellant craves the right to add, amend, alter or delete any of the ground of appeal at the time of presentation of the appeal. 3. Assessee has also filed separate Application for admission of additional grounds in Appeal vide Paper Book containing pages 1 to 11 in which the assessee has stated that in view of the settled decision in the case of NTPC 229 ITR 383 (SC), (legal ground can be raised for first time in collateral and second round also). He further stated that since the issue is purely legal based on facts already on record, the assessee may be allowed to raise the following addition....
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....e penalty proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 and passed the order on 31.3.2014 levying the penalty of Rs. 34,12,448/- in this case. 7. Against the Penalty order the Assessee appealed before the ld. CIT(A), who vide his impugned order dated 03.8.2016 has dismissed the appeal of the assessee thereby confirming the penalty in dispute. 8. At the time of hearing, Ld. Counsel of the Assessee draw our attention towards the assessment order dated 15.12.2011 passed u/s. 143(3) of the Act and has stated that the AO while completing the assessment has not recorded the satisfaction and has not initiated the penalty proceedings. Similarly, at the time of imposing the penalty u/s. 271(1)(c) of the Act, the AO has levied the penalty, but did not mention under which limb the penalty has been imposed whether it is on account of inaccurate particulars of income or concealment of income in the notice as well as in the penalty order. On this count, he stated that entire penalty proceedings stand vitiated as the assessment order as well as penalty order itself is not in accordance with law and in order to support his contention, he placed the reliance on the following decisions, b....
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....esentative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271." 10.1 After perusing the aforesaid contents of the Notice dated 15.12.2011, we are of the view that the AO has initiated the penalty for concealment of particulars of income or furnishing of inaccurate particulars, which is contrary to the provisions of law. We are of the view that notice issued by the AO u/s. 271(1)(c) read with Section 274 of the Act is bad in law as it does not specify which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars. Therefore, the penalty in dispute is not sustainable in the eyes of law. Our aforesaid view is supported by the following decisions:- i) "CIT & Anr. Vs. M/s SSA's Emerald Meadows - 2015 (11) TMI 1620 - Karnataka High Court has held that Tribunal has correctly allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act,....
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.... Karnataka High Court has held that Tribunal has correctly allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner of Income Tax vs. Manjunatha Cotton and Ginning Factory (2013) (7) TMI 620- Karanataka High Court. Thus since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion no substantial question of law arises - decided in favour of assessee." ii) CIT & Anr. Vs. M/s SSA's Emerald Meadows - Hon'ble Supreme Court of India - reported in 2016 (8) TMI 1145 - Supreme Court. The Apex Court held that High Court order confirmed (2015) (11) TMI 1620 (Supra) - Karnataka High Court. Notice issued by AO under section 274 read with section 271(1)(c) to be bad in law as it did not specify....
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....rticulars of income. Therefore, I hold that the AO was fully justified in levying the penalty u/s. 271(1)(c) of the Act. The penalty levied by the AO is upheld. This ground of appeal is rejected." 8. Keeping in view of the aforesaid finding of the Ld. CIT(A), we are of the considered view that the AO has passed the assessment order wherein the AO has recorded his satisfaction on the page 2, 2nd para viz. "I am satisfied that it is a fit case for initiation of penalty proceedings u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income/concealment of income." Further the AO vide his Notice dated 31.12.2007 for initiating the penalty and directed the assessee to appear before him at ---------AM/PM on ---- ----200------ and issued a Show Cause to the assessee stating therein that why an order imposing the penalty of amount should not be made u/s. 271(1)(c) of the I.T. Act, 1961. After perusing the notice dated 31.12.2007 issued by the AO to the assessee, we are of the view that the AO has initiated the penalty for furnishing inaccurate particulars of income/concealment of income, but in the penalty order dated 06.11.2009 he has stated that he is satisfied that the ....