TaxTMI 
TaxTMI 
2019 (3) TMI 599
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....7-2-2011 in which certain papers/documents and loose papers were seized and statements were recorded from him. The assessee was not in India at the time of said search. In course of search in statements recorded from Shri Ratan Kumar Sharma he admitted and surrendered additional income for himself, his wife Maya Devi Sharma his son Dinesh Sharma and his grand-daughter Neha Sharma. The A.O. thereafter issued notice u/s 153A in the name of assessee. The A.O. determined Long term capital gain of Rs. 2,04,36,462/- . The assessee claimed deduction of Rs. 42,00,000/- u/s 54F of I. T. Act, 1961 which was not allowed by Ld. A.O. in assessment completed u/s 153A/143(3) of the Act. In an appeal filed before the Tribunal, the Tribunal have allowed the assessee's claim of deduction U/s 54F of the Act amounting to Rs. 42.00 lacs. With respect to the balance addition upheld amounting to Rs. 1,46,37,002/- on account of long term capital gains, the Assessing Officer levied the penalty after determining the tax @ 20%. The penalty so imposed amounting to Rs. 23,62,067/- was confirmed by the ld. CIT(A) against which the assessee is in further appeal before us. 4. The ld AR Mr. S.R. Sharma, C.A. appe....
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....t sustainable in law. For this proposition, reliance was placed on the decision of the Hon'ble Karnataka High Court in the case of CIT Vs. M/s SSA's EMERALD MEADOWS reported in 2015 (11) TMI 1620 - , wherein Hon'ble Court has held that: - "3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271 (1) (c) of the Income Tax Act, 1961 (for short 'the Act') 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) 359 ITR 565. In our view, since the matter is covered by judgement of the Division Bench of this Court, we are of the opinion, no substantial question of law arised in this appeal for determination by this Court. The appeal is accordingly dismissed." The department has filed SLP i....
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....to levy penalty for concealment of income or furnishing inaccurate particulars. He cannot have both the conditions and if it is so he has to say so in the notice and record a finding in the penalty order ...." 9. Further more, reliance was placed on the decision of the Hon'ble Karnataka High Court in the case of Muninga Reddy Vs. ACIT (2017) 396 ITR 398 and the Telengana & Andhra Pradesh High Court in PCIT Vs. Baisetty Revethi (2017) 398 ITR 88 held the same view. In the above said judgments the Hon'ble courts decided the law position on the issue that the concealment of income and furnishing inaccurate particulars of income, two are different defaults and they cannot be intermixed. Therefore, the order of Ld. CIT (A) holding that it cannot be concluded that penalty notice did not specify the limb for initiation of penalty proceedings i.e. for concealment of income or for furnishing inaccurate particulars of income that itself cannot be reason for invalidating penalty proceedings is wrong and order of CIT (A) deserves to be set aside on this issue and penalty levied by AO deserves to be cancelled. 10. Further reliance was placed on the decision of ITAT, Jaipur Bench in the case....
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....s to come to a definite satisfaction whether the assessee has concealed the income of particulars or furnished the inaccurate particulars of income. The Hon'ble Karnataka High Court in the case of CIT and Another Vs. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Kar.) has held that the notice u/s 274 of the Act should specifically state as to whether penalty is being proposed for concealment of particulars of income or inaccurate particulars of income. In the present case notice under section 274 dated 25/3/2015 enclosed at paper book page 16 reads as under: - "Penalty Notice Under Section 274. Read with Section 271 of the IT Act, 1961. Whereas in the course of proceedings before me for the Assessment Year 2012-13. It appears to me that you have: - Read With Section 271 (1) (c) concealed particulars of income or furnished inaccurate particulars of income." Therefore, there is no specific charge by the Assessing officer. Further, it is noted that the Assessing officer in penalty order (as noted hereinabove) has proceeded on the basis of the assumption that the assessee is satisfied with the assessment order. Therefore, it appears that the assessee has nothing to ....
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....sessment order. 13. As per ld AR, no penalty is imposable for making addition by estimating higher capital gains on the property so sold by the assessee. 14. On the other hand, the ld DR has contended that the Assessing Officer has properly recorded satisfaction for initiation of penalty. For the defect in notice, reliance was placed by the ld DR on the decision of the ITAT Mumbai benches in the case of Shri Mahesh M. Gandhi Vs ACIT in ITA No. 2976/Mum/2016 dated 27/02/2017 and on the decision of the Hon'ble Supreme Court in the case of Mak Data Vs CIT (2013) 358 ITR 593 (SC). As per the ld DR the mere fact that the penalty notice does not specify the limb for initiation of penalty proceedings i.e. for concealment of income or for furnishing of inaccurate particulars of income that itself cannot be a reason for invalidating the penalty proceedings, if the reasons for initiating the penalty are discernible from the assessment order. 15. We have considered the rival contentions and carefully gone through the orders of the authorities below. We had also deliberated on the judicial pronouncements referred by the lower authorities in their respective orders as well as cited by th....
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....ection, reliance is first placed upon the judgment of the Hon'ble Karnataka High Court In the case of CIT v. Manjunatha Cotton and Ginning Factory & Ors. and Veerabhadrappa Sangappa and Co. (359 ITR 565, 577, 601, 603-604) in which the facts are similar. In those bunch of tax appeals, several assessee and several issues were involved. In so far as I.T.A. No. 5020 of 2009 was concerned, one of the substantial questions on which the appeal was filed by the revenue was: "Whether the notice issued under section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is valid and legal?" 18. While answering the above in favour of the assessee, the following findings were recorded by the Hon'ble Court: "61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment furnishing inaccurate particulars of income are different Thus, the Assessing Offi....
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....e Hon'ble Karnataka High Court in the case CIT v. SSA'S Emerald Meadows (Income Tax Appeal No. 380 of 2015 decided on 23.11.2016). In this case also s similar situation arose in as much as the Hon'ble Court was required to adjudicate on the following substantial question: (1) Whether, omission of assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?" 22. The aforesaid question was dealt with by the Hon'ble Court in favour of the assessee in the following words: "3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with section 271(1)(c) of the Income-tax Act 1961 (for short 'the Act; 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 le. whether for concealment of particulars of income or furnishing of inaccurate particulars of....
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....air opportunity to explain its stand, thereby, violates the principles of natural justice. As held by the Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC), the aforesaid principle laid in Dilip N. Shroff (supra) still holds good in spite of the decision of the Hon'ble Supreme Court in UOI v/s Dharmendra Textile Processors (2008) 306 ITR 277 (SC). The Hon'ble Jurisdictional High Court in CIT v/s Smt. Kaushalya & Ors., [1995] 216 ITR 660 (Bom), observed that notice issued under section 274 must reveal application of mind by the Assessing Officer and the assessee must be made aware of the exact charge on which he had to file his explanation. The Court observed, vagueness and ambiguity in the notice deprives the assessee of reasonable opportunity as he is unaware of the exact charge he has to face. The Hon'ble Jurisdictional High Court in Samson Perinchery (supra), following the decision of Hon'ble Karnataka High Court in CIT v/s Manjunatha Cotton & Ginning Factory, [2013] 359 ITR 565 (Kar.), held, order imposing penalty has to be made only on the ground on which the penalty proceedings has been initiated. 26. The Hon'ble J....