TaxTMI 
TaxTMI 
2020 (1) TMI 449
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.... Software India Private Limited ("the assessee") preferred this appeal. 2. Brief facts of the case are that the assessee is engaged in the business of information technology enabled services and 100 percent EOU unit. For the assessment year 2012-13, it had filed its return of income on 28/11/2012 declaring income of Rs. 52,840/-and claimed deduction under section 10B of the Income Tax Act, 1961 (for short "the Act") to the tune of Rs. 36,48,138/-. Assessment under section 143(3) of the Act was complete by order dated 13/3/2015 determining the total income of the assessee at Rs. 37,00,980/-by making addition of Rs. 36,48,138/-on account of disallowance of the claim of exemption under section 10B of the Act. Learned Assessing Officer simul....
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....bjection whatsoever they have participated in the penalty proceedings as well as the proceedings before the Ld. CIT(A) and, therefore, no prejudice was caused to the case of the assessee. He, therefore, prayed to dismiss the appeal. 5. We have gone through the record in the light of the submissions made on either side. While recording the satisfaction in the order dated 13(3) of the Act, 2015 passed under section 143(3) of the Act, learned Assessing Officer stated that she was satisfied that the inaccurate particulars of income were furnished thereby concealing an income on account of wrong claim of deduction. It could be seen from the notices dated 11/3/2015 issued under section 274 of the Act read with section 271(1)(c) of the Act that....
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.... 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 initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically s....
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.... of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?" 9. And the Hon'ble High Court ruled answered the same in favour of the assessee observing that: "The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnis....
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..... The Respondent had challenging the upholding of the penalty imposed under section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgement in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 taxman.com 241 (Kar), the appeal against which was dismissed by the Suprem....