TaxTMI 
TaxTMI 
2019 (9) TMI 682
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....hing of any inaccurate particulars of income nor could it be validly held that there was any concealment of income on the facts of the case so as to sustain the levy of penalty. 2.1 That the learned Commissioner of Income Tax (Appeals) has further erred in law and on facts by failing to appreciate that no satisfaction has been recorded so as to entail the levy of penalty and as such, the order passed by learned assessing officer is bad in law and the penalty sustained is liable to be cancelled. 3. That the learned Commissioner of Income Tax (Appeals) has failed to appreciate the basic fact that a sum of Rs. 2,57,569/- represented the deduction U/S 43B on account of following: Central Sales Tax - Rs. 64,484.00 Late payment of E.S.I. - Rs. 1,730.00 Karnataka Sales Tax - Rs. 1,91,355.00 Total - Rs. 2,57,569.00 Deduction U/S 43B were duly disclosed by the appellant company, and there could be no basis much less valid basis to disallow the same and further imposition of penalty in misconceived and unsustainable in law and should be deleted, as such." 2. Briefly stated the facts necessary for adjudication of the issue at hand are : Assessee company is a limited company....
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.... the assessee has concealed the particulars of income or has furnished inaccurate particulars of income and relied upon the decisions of Hon'ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning Factory-359ITR 565, CIT vs. SSA's Emerala Meadows -73 taxmann.com 241 (Kar.) (Revenue's SLP dismissed in 242 taxman 180) and Hon'ble High Court of Delhi in Pr. CIT vs. Sahara India Life Insurance Company Ltd. in ITA 475/2019 order dated 02.08.2019. 8. In order to proceed further, we would like to peruse the notice issued by AO u/s 274 read with section 271(1)(c) of the Act to initiate the penalty proceedings which is extracted as under for ready perusal:- "NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. Asstt. Commission of Income Tax, Central Circle-25, New Delhi. Dated: 26.12.2011 To M/s Sudhir Infra Vidyut Ltd. 507, International Trade Tower, Nehru Place, New Delhi -110 019. Whereas in the course of proceedings before me for the assessment year 2005-06 it appears to me that you:- * Have without reasonable cause failed to comply with a notice under section 142(1)/143(2) of the Income Tax Act, 1961 dated......... * Have....
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....ceedings 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 form 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 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 imposed on the assessee. 60. Clause (c) deals with two specific o....
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....ether 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 T Ashok Poi v. CIT [2007] 292 ITR 11 /161 Taxman 340 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 CIT v. Manu Engg. [1980] 122 ITR 306 and the Delhi High Court in the case of CIT v. Virgo Marketing (P) Ltd. [2008] 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. Therefore, 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. " 11. Hon'ble Apex Court in case of CIT vs. SSA's Emerala Meadows - (2016) 73 taxmann.com 248 (SC) while dismissing the SLP filed by the Revenue quashing the penalty by the Tribunal as well as Hon'ble High Court on ground of unspecified notice has....