TaxTMI 
TaxTMI 
2019 (8) TMI 1270
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....ppellants crave leave to alter, amend and / or add any other ground of appeal. 2. At the very outset, Ld. AR appearing on behalf of the assessee drawn our attention to letter dated 26th July, 2019 filed for seeking admission of additional ground, which are reproduced below:- 6. The Penalty Notice dated 28th December, 2010 issued u/s 271(1)(c) read with section 274 of the Income Tax Act, 1961 did not specify whether the Notice is issued for concealing the particulars of income or furnishing inaccurate particulars of such income and therefore, it is bad in law and the order passed pursuant thereto is void. 7. The learned Commissioner of Income Tax (Appeals) erred in holding that the penalty is rightly imposed for furnishing inaccurate particulars of income when the Assessing Officer has levied the penalty on the ground of concealment of particulars of income 3. Ld. AR submitted before us that before Ld. CIT(A), it was contended that penalty order passed by the AO was bad in law as the notice issued u/s 274 of the Act did not specify whether the Notice is issued for concealing the particulars of income or furnishing inaccurate particulars of income. The copy of....
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....en raised by the assessee by way of additional grounds. Additional ground Nos. 6 & 7 10. The additional grounds Nos. 6 & 7 raised by the assessee are inter connected and inter related and relates to challenging the Penalty Notice dated 28th December, 2010 issued u/s 271(1)(c) read with section 274 of the Income Tax Act, 1961, therefore we thought it fit to dispose of the same by this common order. 11. Learned AR submitted that as the notice u/s. 274 does not specify the charge against the assessee and the same is invalid and thereby the penalty order is liable to be quashed as without jurisdiction. In support the assessee seeks to rely on judgment of Hon'ble Karnataka High Court in case of Manjunatha 359 ITR 565 (Kar) and the assessee specifically seeks to draw attention to pages 600 to 603 of the said judgment. The said judgment has been followed in various subsequent judgments. In case of SSA Emerald before the Hon'ble Karnataka High Court, question of law 3 read as follows: "(3) Whether on facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 wit....
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....aid decision squarely applies to the facts of the present case. As far as the judgment of the Hon'ble Jurisdictional High Court in Maharaj'Garage (supra) relied upon by the learned Departmental Representative, on a careful reading of the said judgment, we are of the view that it will have no application to the facts of the case. As could be seen, the basic issue arising out of the reference application which fell for consideration of the Hon'ble Jurisdictional High Court was, while granting previous approval by Inspecting Assistant Commissioner of Income-tax as per provisions of section 271(1)(c)(iii) of the Act whether the assessee was required to be given an opportunity of being heard. While considering this issue, the Hon'ble Jurisdictional High Court observed that provisions of section 271(l)(c)(iii) does not attract rule of presumption of mens rea as the penalty imposable under the said provision is for the breach of civil obligation. The observations of the Hon'ble Court against issuance of show cause notice appears to be in the context of quantum of penalty proposed to be imposed and not with reference to the doing away with the issuance of show cause not....
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....ation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be i....
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....e Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations, The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Thom, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." 16. The conclusion drawn therein by their Lordships at para 63 thereof and particularly at p) to s) thereof are as under: - "63 ..................................... a) .................
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.... the Coordinate Bench of ITAT in ITA no. 2313/Mds/2013 in the case of Ramaswamy Senthivel Vrs. ACIT dated 25.09.14 had dealt with the identical ground, the operative portion of the order of Coordinate Benches is reproduced below:- 5. We have heard the submissions made by the representatives of both the sides, and have also perused the orders of the authorities below. The assessee has not disclosed interest from Fixed Deposits in his return of income for the AY under consideration. The assessee had made investment in NRE Fixed Deposits from his NRE SB A/c in the year 2002. During that period, the assessee was sent on a particular assignment by the employer company to US. The assessee was allegedly under bonafide impression that since the deposits are made from NRE A/c, the interest income there from is exempt u/s.10(4), even though the assessee had returned to India and was a resident in India. The FERA, 1973 has been repealed and has been replaced with FEMA, 1999. The corresponding provisions contain in section 2(q) defining 'person resident outside India' in FERA, 1973 are contained in section 2(w) of FEMA, 1999. The 'person resident outside Ind....