2019 (11) TMI 975

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.... of Income and without striking of any of the clauses of notice dated 26.03.2013 for initiation of penalty is invalid and the order passed consequent thereto deserve to be set aside. 2. That the penalty imposed on addition of Rs. 3,67,008/- being excess stock of marble is barred by limitation as this issue had been finally concluded after the order of Ld. C.I.T. (Appeals)-3, Lucknow, and there is no 2nd. Appeal on this issue. 3. The Ld. C.I.T. (Appeal) erred on facts and in law in upholding the penalty on estimated addition of Rs. 5,91,667/- on account of estimation of G. P. @ 11%. 4. The Ld. C.I.T. (A) did not appreciated that penalty has been imposed solely on estimated value of excess stock of marble and on est....

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....at the charge for which penalty is proposed to be levied under section 271(1)(c) of the Act, whether for concealment of income, or for furnishing of inaccurate particulars of income, is not specific. The law mandates that the authority, who is proposing to impose penalty, shall be certain as to the basis on which the penalty is being levied and the notice must reflect that specific reason, so that the assessee, to whom such notice is given, can prepare himself regarding the defence, which he would like to take to support his case. This is even enshrined in the principles of natural justice and as has been upheld by Hon'ble Apex Court and other High Courts. 7. In 'CIT vs. SSA's Emerald Meadows', [2016] 73 Taxmann.com 248, the Hon'....

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....ntioned would not satisfy the requirement of law. The assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. Penalty proceedings are distinct from assessment proceedings, though it emanates from the assessment proceedings; still it is separate and independent proceedings all together. 9. In 'Meherjee Cassinath Holdings Pvt. Ltd vs. ACIT (ITAT Mumbai)', ITA No. 2555/MUM/2012, order dated 28/04/2017, the observation of the Bench was that penalty proceedings under section 271(1)(c) of the Act are "quasi-criminal" proceedings and ought to comply with the principles of natural justice. The non-s....