TaxTMI 
TaxTMI 
2019 (7) TMI 1682
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....g before us, the assessee has taken following additional ground: "That the show cause notice issued u/s 274 r/w/ 271(1)(c) of the Act, is quite vague and did not at all 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 furnishing of inaccurate particulars of income. The impugned penalty based on such a notice being contrary to the provisions of law and facts kindly be quashed." 4. It was contended by the ld AR of the assessee that the additional ground so taken by the assessee is a legal ground which do not require any fresh investigation of facts inasmuch as the same are already available on record. Reliance was placed on the decision of the Hon'ble Supreme Court in the case of NTPC Ltd. 229 ITR 383 (SC). 5. We have heard the rival contentions and carefully gone through the orders of the authorities below and found from the record that there was a search at the assessee's premises, thereafter the assessment was framed U/s 153A r.w.s. 143(3) of the Act wherein addition was made on account of undisclosed income as well as low household withdrawals. The addition so mad....
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....aced in the paper book. It was contended that the notice so issued are vague in so far as the A.O. has not struck the irrelevant portion in the notice and the notice so issued have the following allegation "have concealed the particulars of income or furnished inaccurate particulars of such income". Our attention was also invited to the penalty order passed U/s 271(1)(c) of the Act wherein the penalty was finally levied for "concealment of particulars of income". As per the ld. AR, penalty so imposed is bad in law in so far as notice issued U/s 274 r.w.s. 271(1)(c) of the Act is improper and invalid. Reliance was placed on the decision of the Hon'ble Karnataka High Court in the case of CIT & Anr. Vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 0565 (Karn HC), wherein it was held as under: "62. The penalty proceedings are distinct from assessment proceedings, and independent therefrom. The assessment proceedings are taxing proceedings. The proceedings for imposition of penalty though emanating from proceedings of assessment are independent and separate aspects of the proceeding, Separate provision is made for the imposition of penalty and separate notices of demand a....
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....i) In CIT v/s Ishtiaq Hussain (1998) 232 ITR 673 (All), it was held as under: "It is settled that the findings given in assessment proceedings, would be relevant and admissible materials in penalty proceedings, but those findings cannot operate as res judicata because the considerations that arise in penalty proceedings are different from those in the assessment proceedings. It is evident from the order of the Tribunal that it has recorded a categorical finding that on the evidence led by the assessee it could not be said that on the balance of probabilities, the amounts in question were not received by the assessee from Sri Ram Swarup. In the opinion of the Tribunal, the assessee had discharged the onus that lay upon him under the Explanation to s. 271(1)(c) as it stood at the relevant time. The findings recorded by the Tribunal are pure findings of fact based on appreciation of evidence." (iv) Gem Gramit Vs. DCIT 120 TTJ 992 (Chennai). (v) Durga Kamal Rice Mills v/s CIT (2004) 265 ITR 25 (Cal.), (vi) CIT & Anr. v/s Anwar Ali (1970) 76 ITR 696 (SC). (vii) CIT vs. Anantharam Veerasinghaiah & Co. (1980) 123 ITR 457 (SC). (viii) C....
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....he Act on two or more additions/disallowances, one or more falling under the expression 'concealment of particulars of income' and the other under the 'furnishing of inaccurate particulars of income', he must specify it so by using the word 'and' between the two expressions in the notice at the time of initiation of penalty proceedings. If he remains convinced in the penalty proceedings that the penalty was rightly initiated on such counts and imposes penalty accordingly, he must specifically find the assessee guilty of 'concealment of particulars of income' and also 'furnishing of inaccurate particulars of income' in the penalty order. If the charge is not levied in the above manner in all the three clear-cut situations discussed above in the penalty notice and also in the penalty order, the penalty order becomes unsustainable in law." 10. On the other hand, the ld DR has contended that the quantum addition so made by the A.O. has not only been confirmed by the ld. CIT(A), but by the ITAT and the Hon'ble High court, therefore, concealment of income is clearly proved and the A.O. has correctly levied the penalty U/s 271(1)(c) of the Act. W....
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....essee as determination of such limb is sine qua non for imposition of penalty under section 271 (1) (c) of the Act. 12. There can be no doubt that penalty u/s. 271(1)(c) of the Act is levied for concealing particulars of income or for furnishing inaccurate particulars of such Income, which are the two limbs of this provision. In other words, it is only when the authority invested with the requisite power is satisfied that either of the two events existed in a particular case that proceedings u/s. 271(1)(c) of the Act are initiated. This pre-requisite should invariably be evident from the notice issued u/s. 274 r.w.s. 271 of the Act, which is the jurisdictional notice, for visiting an assessee with the penal provision. The intent and purpose of this notice is to inform the assessee as to the specific charge for which he has been show caused so that he could furnish his reply without any confusion and to the point. In the present case, neither the assessee nor anyone else could make out asto whether the notice u/s. 274 r.w.s. 271 (1)(c) of the Act was issued for concealing the particulars of income or for furnishing inaccurate particulars of such income disabling it to meet with t....
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....ce has to be appropriately marked Similar is the case for furnishing inaccurate particulars of income. "(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. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 15. Thereafter, in so far as the manner in which the statutory notice was required to be issued, the Hon'ble Court concluded thus: (p) Notice u/s 274 of the Act should be 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. 16. Finally, in concurring with the findings recorded in the order of the Tribunal, it was held thus: 66. In view of the aforesaid law, we are of the view that the Tribunal was justified in holding that the entire proceedings are vitiated as the notice issued is not in accordance with law and accordingly justified in interfering with the order passed by the appellate authority as well as the assessing au....
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....ery [Income Tax Appeal No. 1154 of 2014 and others dated 05.01.2017] had also occasion to consider a similar issue. In this case, though proceedings u/s. 271(1)(c) of the Act were initiated for furnishing of inaccurate particulars of income, in the notice issued u/s. 274 r.w.s. 271 of the Act in the standard form, the charge for which it was issued was also not identified, as in the present case. In deleting the levy, so far as non-specification of the default in the jurisdictional notice, the following findings were recorded by the Hon'ble Bombay High Court: "7 Therefore, the issue herein stands concluded in favour of the Respondent-Assessee by the decision of the Karnataka High Court in the case of Manjunath Cotton and Ginning Factory (supra). Nothing has been shown to us in the present facts which would warrant our taking a view different from the Karnataka High Court in the case of Menjuneth Cotton and Ginning Factory (supra). 8. In view of the above, the question as framed do not give rise to any substantial question of law Thus, not entertained" 21. The Hon'ble Supreme Court in Dilip N. Shroff v/s JCIT, [2007] 291 ITR 519 (SC), has observed that w....
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....to say so in the notice and record a finding in the penalty order ...." 23. Moreover, the Amritsar Bench of the ITAT in the case of HPCL Mittal Energy Ltd. Vs ACIT (supra) with regard to levy of charge at the stage of initiation of penalty by issue of notice U/s 274 vis a vis charge levied in the penalty order U/s 271(1)(c) of the Act, the precise observation of the Tribunal was as per para 15 which reads as under: "15. The moot question is that what should be the nature of specification of a charge by the AO at the stage of initiation of penalty proceedings and at the time of passing the penalty order. Is the AO required to specify in the penalty notice/order as to whether it is a case of 'concealment of particulars of income'; or 'furnishing of inaccurate particulars of income'; or both of them, which can be expressed by using the word 'and' between the two expressions. When the AO is satisfied that it is a clear-cut case of concealment of particulars of income, he must specify it so in the notice at the time of initiation of penalty proceedings and also in the penalty order. The AO cannot initiate penalty on the charge of 'concealment of p....