TaxTMI 
TaxTMI 
TaxTMI 
2021 (7) TMI 1022
X X X X Extracts X X X X
X X X X Extracts X X X X
.....2009 declaring an income of Rs. 1,23,39,670/-. The assessment u/s. 143(3) was, however, complete at an income of Rs. 4,25,51,780/- by making addition of Rs. 11,32,655/- on account of disallowance u/s. 14A, Rs. 13,381/- on account of non-reconciliation of ITS report, Rs. 2,04,92,993/- on account of disallowance of expenditure for office renovation, Rs. 50,00,000/- on account of disallowance of deduction claimed u/s. 80GGB and Rs. 35,73,085/- on account of disallowance of interest. The assessee challenged the assessment order in appeal before ld. CIT(A), who confirmed the additions made. Based on these additions, the Assessing Officer initiated penalty proceedings u/s. 271(1)(c) of the Income-tax Act and imposed penalty of Rs. 1,02,69,097/- ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... placing reliance on the decisions of the Hon'ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565, Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 taxman.com 241 (Kar) and also the decision of the Hon'ble jurisdictional High Court in the case of Ld. PCIT vs. Sahara India Life Insurance Co Ltd in ITA No. 475 and batch of 2019, it is submitted that the penalty cannot be sustained. 5. Ld. DR relied on the orders of authorities below and placing on the decision of the Hon'ble Madras High Court in the case of Sundaram Finance Ltd vs. CIT (2018) 403 ITR 407 (Madras), Ld. DR submitted that the assessee understood the purport of the notice and without raising any objection whatsoev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....dings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." 12. The Special Leave Petition filed by the Revenue challenging the aforesaid judgement of the High Court was dismissed by the Hon'ble Supr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ows (2016) 73 taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this court is unable to find any error having been committed by the ITAT." 14. It is, therefore, clear that for the AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in notice u/s 274 of the Act vitiates the assumption of jurisdiction by the learned Assessing Officer to levy any penalty. In this case, facts stated supra, clearly establish that the notice issued under section 274 read with 271 of the Act is defective and, therefore, we find it difficult to hold that the learned AO rightly assumed jurisdiction to pass the o....