TaxTMI 
TaxTMI 
2018 (1) TMI 1481
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.... the same is not specified any particular charge on the basis of which the concealment penalty has been levied. Thus, the notice issued and the subsequent penalty order passed under section 271(1)(c) are void ab initio and the same may be quashed. On merit: 2. The Ld. CIT (A) erred in upholding the action of the Ld. A.O. in passing the order dated 27.07.2017 under section 271(1)(c) of the Act by levying penalty of Rs. 20,50,500/- without appreciating the facts and circumstances of the case. Thus, the levy of penalty amounting to Rs. 20,50,500/- under section 271(1)(c) of the Act is not justified and same may be deleted. 3. The Ld.CIT (A) failed to appreciate that Appellant has neither concealed any particulars of ....
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....rate particulars of income which reads as under: - "Penalty proceedings u/s 271(1)(c) of the Act are initiated separately for furnishing inaccurate particulars of income which lead to concealment of particulars of income." While passing the penalty order under Section 271(1)(c) of the Act dated 28.08.2014, the AO imposed penalty of Rs. 20,50,500/- for concealment of income. 5. Though the legal issue of challenging the order imposing penalty under Section 271(1)(c) of the Act was not taken up before the CIT(A) and being taken for the first time before this Bench, in our opinion the assessee is within its full rights to raise the issue before us. The learned A.R. vehemently submitted before us that the order imposing penalty un....
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....evied the order of the CIT(A) deserves to be affirmed. 7. We heard the rival submissions and perused the material on record. The undisputed facts are that the AO initiated penalty proceedings for furnishing inaccurate particulars of income whereas the penalty was finally imposed for concealment of income. In our considered view the AO has to specifically point out one of the two limbs on which the penalty is proposed to be levied on the assessee so that the assessee can get full natural justice to respond to the charge for which it is penalised but in the present case this is not so and thus the AO himself was not clear as to which limb penalty was to be imposed. The case of the assessee also gets support from the decision of the Coordin....
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....essing Officer while issuing the penalty notice. 4 The impugned order relied upon the following extract of Karnataka High Court's decision in CIT v/s. Manjunath Cotton and Ginning Factory 359 ITR 565 to delete the penalty: - "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 Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it as case of furnishing of inaccurate particular....
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....y different meanings/connotations. 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 other 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 the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the Assessee has no notice. 7 Therefore, the issue herein stands concluded in favour of the Respondent-Assessee by the decision of the Karnataka High C....