TaxTMI 
TaxTMI 
2019 (11) TMI 1299
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....eligible deductions allowable u/s 10BA of I.T.Act, 1961. 3. The learned Assessing Officer has wrongly imposed the penalty on the ground that neither the assessee nor the representative of the Assessee appears or filed any document against the notice. But on 25.03.2014 Mr. V.C. Gautam C.A. appeared and filed written explanation which was given to the A.O. personally. The A.O. has also given some noting on the written explanation. This is absolutely wrong that none appeared on 25.03.2014. 4. The Learned Assessing Officer wrongly written the name of Assessee as Kohli International instead of correct name as Kohli Inter Continental." 3. Brief facts of the case shows that assessee is a company who filed its return of income on 31/10/2006 declaring an income of Rs. 2492285/- assessment u/s 143 (3) of the income tax act was passed on 15/12/2008 wherein the deduction under section 10BA was disallowed of Rs. 830762/-. The total income of the assessee was assessed at Rs. 5150310/-. On the above addition the penalty were initiated u/s 271(1)(C) for furnishing inaccurate particulars of income. The assessee preferred an appeal before the learned CIT(A) who vide order dated 16.09.2016 confi....
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....see aggrieved with the order of the learned Assessing Officer preferred the appeal before the learned CIT(A) who also confirmed the penalty as per order dated 16/09/2016 and therefore assessee aggrieved with that order has preferred this appeal before us. 5. The learned Authorised Representative submitted that the assessee has made the claim before the learned Assessing Officer for deduction u/s 10BA of the Income Tax Act. The above claim was denied to the assessee, no doubt, same has been confirmed by the Commissioner of Income Tax(Appeals). However, the assessee has completely produced the information in the computation of the total income and no inaccurate particulars were filed by the assessee. None of the particulars filed by the assessee were found to be wrong. He therefore stated that when there is a mere denial of deduction, the penalty on the same cannot be levied. He further referred to the fact that the learned Assessing Officer has issued notice u/s 274 read with section 271 of the Income Tax Act on 15/12/2008 where none of the twin charges have been struck of by the learned Assessing Officer. He, therefore, submitted that in such circumstances the penalty levied by th....
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....culars of such income" by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions against him/her, he/she is required to be specifically made aware of the charges to be leveled against him/her. Hon'ble High Court of Karnataka in case of CIT vs. Manjunatha Cotton and Ginning Factory (supra) while deciding the identical issue held that when the AO has failed to issue a specific show-cause notice to the assessee as required u/s 274 read with section 271(l)(c), penalty levied is not sustainable. The operative part of the judgment is reproduced as under:- "59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions coul....
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.... to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 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 cla....