2020 (9) TMI 95

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....d 17.03.2014 on the following substantial questions of law: (i) Whether there is proper assumption of jurisdiction for penalty proceedings when the appellant has not been put to notice of the correct limb under Section 271(1)(c) for which the penalty has been initiated on the facts and circumstances of the case? (ii) Whether the Tribunal was justified in law in not appreciating that two orders of penalty cannot be passed for one Assessment year and further whether it is permissible in law to issue notice under Section 271(1)(c) for the Assessment year 2002-03 but pass an order of penalty for the Assessment year 99-00 and consequently whether there is valid assumption of jurisdiction under Section 27(1)(c) under the facts and circumstan....

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....der the facts and circumstances of the case? 2. Facts leading to filing of this appeal briefly stated are that assessee is a partnership firm constituted under the deed of partnership dated 16.03.1996. The business of the firm is to construct, develop, build and sell flats, shop, residential and commercial complex, godown and office etc. The assessee did not commence any business since its inception till the end of 31.03.1999. The only activity carried on by the assessee during the year was commencement of a construction of a shopping center in Arcot Srinivasachar street, Bangalore towards which advances to the tune of Rs. 75,50,000/- were received by the assessee from various persons. The assessee for the Assessment year 1999-00 declared ....

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....e notice under Section 274 read with Section 271(1)(c) was issued for the Assessment year 2002-03 and not for impugned assessment year 1999-00 and therefore, the notice is per se bad in law and the order of penalty passed on the basis of the aforesaid notice is without jurisdiction. It is also pointed out that in the notice, there is no mention that the assessee has concealed the particulars of income or has furnished inaccurate particulars of income and therefore, the notice is bad in law. It is also urged that penalty proceedings and assessment proceedings are distinct and since, the assessee had not commenced the business, the assessee could not have earned any income, which had not been accounted for. However, the aforesaid aspect of th....

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.... supported the order passed by the authorities. It is however fairly submitted that in case, first substantial question of law is answered in favour of the assessee, the remaining substantial questions of law are rendered academic. 6. We have considered the submissions made by learned counsel on both the sides and have perused the record. It is pertinent to note that the assesssee since, its inception till the end of previous year i.e., 31.03.1999 did not commence any business. The notice under Section 274 read with Section 271(1)(c) was issued for Assessment year 2002-03 and not for the Assessment year in question that is 1999-00. Besides this, it is noteworthy that there was no mention in the notice that the assessee has concealed the in....