TaxTMI 
TaxTMI 
2020 (2) TMI 76
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.... for this reason that the assessee did not furnish Tax Audit Report for these years as required u/s 44AB of I T Act, 1961. The amount of Penalty is Rs. 42,500/- in A. Y. 2009 - 10, Rs. 30,000/- in A. Y. 2010 - 11, Rs. 150,000/- in A. Y. 2011 - 12, Rs. 150,000/- in A. Y. 2012 - 13, Rs. 72,225/- in A. Y. 2013 - 14 and 82,550/- in A. Y. 2014 - 15. 3. It was submitted by the learned AR of the assessee that the assessee is a Civil Contractor following Project Completion Method and because of search and at the instance of the search party, the assessee accepted to recognise the revenue on partial completion and accordingly, the turnover was recognised and return was filed. As per Project Completion method, there was no turnover in any of these years as was being followed by the assessee. It was also submitted that there is no books and accounts prescribed under Rule 6F (1) for Civil Contractor and because of these facts, in these years, the assessee was not required as per law to maintain any books of accounts and in the absence of books of accounts, there cannot be tax audit requirement u/s 44AB. He placed reliance on the tribunal order rendered in the case of K. V. Ramachandran vs. ....
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....ssions. We find that the Judgment of Hon'ble Karnataka High Court rendered in the case of CIT vs. Manjunath Cotton & Ginning Factory (Supra) is squarely applicable in the present case because learned DR of the revenue could not point out any difference in facts. We find that in each of the notices issued by the AO under section 274, the AO is alleging that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income. Hence it is seen that the allegation is vague. Para 63 of this judgment is relevant because it contains the conclusion and hence, we reproduce it as under:- "CONCLUSION 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 271. e) The existence of such conditions should....
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....ellate authority 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. u) 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 c....
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....erest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of twenty per cent. of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date-- (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (1A) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall ....
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....ecorded on or before the date of search in the books of account or other documents maintained in the normal course relating to such previous year; or (B) otherwise not been disclosed to the 5752[Principal Chief Commissioner, Chief Commissioner or Principal Commissioner or Commissioner] before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted." 9. As per Para 9.2 of the Penalty order, it is stated by the AO that the case of the assessee falls under clause (a) of sub section (1) of section 271AAB of I T Act. As per the provisions of this clause as reproduced above, this is the pre-condition that such assessee in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived. Neither in the assessment order nor in the penalty order, this fact ....