TaxTMI 
TaxTMI 
2021 (12) TMI 1094
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....come of Rs. 96 Lakhs ? (II) Whether the Income Tax Appellate Tribunal, Nagpur was justified in law in upholding the levy of penalty under Section 271 (1) (c) of the Income Tax Act, 1961 when the assessee had offered income of Rs. 96 Lakhs in order to buy peace and avoid litigation even though no such income is assessable at the hands of assessee ? 2. After hearing the learned counsel for the parties for some time an additional substantial question of law was framed on 23.11.2021 which reads as under: (III) "Whether the show cause notice dated 12.02.2008 issued to the appellant without indicating that there was concealment of particulars of income or furnishing of incorrect particulars of such income would vitiate the penalty proceeding....
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.... penalty proceedings. It was his submission that under Section 271(1)(c) of the said Act penalty was contemplated either for concealment of income or for furnishing incorrect particulars of the same or both. It was necessary for the Authority issuing the show cause notice to specifically indicate as to whether there was any concealment of particulars or furnishing of incorrect details on the part of the Assessee or both. In that regard the learned counsel referred to the decisions in Income Tax Appeal No.796 of 2016 with connected appeal (The Pr. Commissioner of Income Tax-17 Vs. Hafeez S. Contractor ) decided on 11.12.2018, Commissioner of Income Tax vs. Samson Pernchery (2017) 98 CCH 0039 (Mum.), Principal Commissioner of Income Tax (Cent....
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....use notice the Assistant Commissioner of Income Tax had recorded his satisfaction as regards the necessity of initiating the penalty proceedings against the Assessee. Such a conclusion having been recorded by the Assistant Commissioner of Income Tax, the show cause notice could not be faulted on a technical ground that a specific assertion as regards concealment of particular income/furnishing of incorrect income had not been specified therein. Referring to the order passed by the Assistant Commissioner of Income Tax dated 31.12.2007 he submitted that the satisfaction recorded was with regard to both the aforesaid aspects as could also be gathered from the order dated 10.03.2010 passed under Section 271(1)(c) of the said Act. Referring to t....
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....er Section 260A of the said Act. This Court in the aforesaid decision after referring to earlier precedents has held that an appeal under Section 260A of the said Act can be entertained by the High Court on the issue of jurisdiction even if that issue was not raised before the Tribunal. The facts of the case indicate that the question with regard to validity of the show cause notice issued under Section 271(1)(c) of the said Act was permitted to be raised in appeal under Section 260A of the said Act for the first time since the same was a jurisdictional issue going to the root of the lis. In view of aforesaid decision we do not find any reason not to consider a similar jurisdictional issue as raised by the Assessee in the present appeal. &n....
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....cords satisfaction for imposing penalty on one or the other, or both grounds mentioned in Section 271(1)(c), does a mere defect in the notice-not striking off the irrelevant matter-vitiate the penalty proceedings? 9. After considering various decisions of the Hon'ble Supreme Court and of this Court including the decision in Dilip Shroff (supra) the Full Bench answered the aforesaid question as under: "181. It does. The primary burden lies on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into action only through the statutory notice under Section 271(1)(c), read with Section 274 of the IT Act. True, the assessment proceedin....
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....re was concealment of particulars of income or that the Assessee had furnished inaccurate particulars of income. We therefore find that issuance of such show cause notice without specifying as to whether the Assessee had concealed particulars of his income or had furnished inaccurate particulars of the same has resulted in vitiating the show cause notice. Heavy reliance was placed by the learned counsel for the Revenue on the decision in Mak Data Private Limited (supra) to urge that the penalty contemplated by Section 271 (1) (c) of the said Act was in the nature of civil liability and mens rea was not essential therein. The decision in Dilip Shroff (supra) having been held as not laying down good law in Dharmendra Textile Processors Ltd. (....