TaxTMI 
TaxTMI 
TaxTMI 
2019 (12) TMI 401
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.... purpose of the Act since AO did not specify the charge for which penalty proceedings were initiated and further there was non-application of mind on the part of the Assessing Officer. The facts and circumstances of the case relied upon by the CIT(A) is not applicable in the present case where both limbs of section 271(1)(c| i.e. "concealment of particulars of income" as well as "furnishing of inaccurate particulars of income" is relevant and applicable. Thus the CIT(A) ought to have noticed that the notice issued by the Assessing officer is valid. 3. For these and other grounds that may be advanced at the time of hearing the order of the learned Commissioner of Income-tax(Appeals), Thiruvananthapuram on the above points may be set aside and that of the Assessing Officer restored. 3. At the outset, there was a delay of 232 days in filing the appeal before the Tribunal. The Ld. DR has filed condonation petition accompanied by an affidavit stating that as directed by the Pr. CIT, Trivandrum, all the required documents had been sent to the office of the Assistant Registrar, ITAT, Cochin Bench on 02/01/2019. It was submitted that the copy of the same was sent to the office of the ....
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.... You are requested to appear before me at 2.40 P.M. on 04.01.2017 and show cause why an order imposing penalty on you should not be made under section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before my such order is made under section 271. sd/- (Aswathy V) Assistant Commissioner of Income Tax Circle 1(1), Thiruvananthapuram 5. On appeal, the CIT(A) observed that a similar issue was decided by the Tribunal in favour of the assessee in the case of Babu Mathew vs. ACIT in ITA Nos. 95&96/Coch/2018 dated 19/01/2018 wherein it was held as follows: "10. We have heard the rival submissions and perused the material on record. We have given a careful consideration to the rival submissions. The argument of the learned counsel for the Assessee was that the show cause notice u/s.274 of the Act which is in a printed form and the AO has indicated in the said notice as to whether the penalty is sought to be levied on the assessee for "furnishing inaccurate particulars of income" or "concealing part....
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....ection 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 imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the....
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....ome 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. 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." The final conclusion of the Hon'ble Court was as follows:- "63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section ....
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....thority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, ....
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....en above, we hold that levy of penalty in the present case cannot be sustained. We therefore cancel the orders imposing penalty on the Assessee and allow the appeals by the Assessee." 4.1 In view of the above decision of the Tribunal, the CIT(A) held that the notice issued under section 274 r.w.s. 271(1)(c) of the Act without striking off the irrelevant limb was invalid and consequently, penalty order passed by the Assessing Officer was also invalid. Hence, the CIT(A) deleted the penalty levied u/s. 271(1)(c) of the Act and allowed the appeal of the assessee. 5. Against this, the Revenue is in appeal before us. 6. We have heard the rival submissions and perused the record. The main contention of the ld. DR is that penalty was levied by the Assessing Officer for concealment of particulars of income and furnishing inaccurate particulars of such income. We have gone through the assessment order dated 27/12/2016. As seen from the assessment order, it was mentioned in last para that penalty u/s. 271(1)(c) would be initiated separately for furnishing inaccurate particulars of income. In the penalty order dated 29/06/2017, in the last para of page 2 of it, the Assessing Officer ment....