TaxTMI 
TaxTMI 
2022 (5) TMI 1013
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.... order of penalty passed u/s. 271(1 )(c) of the I.T. Act, 1961 imposing penalty amounting of Rs. 2,47,955/- levied by the Assessing officer. 1.2. That on the facts and the circumstances of the case the Hon'ble CIT(A) failed to appreciate that the penalty amounting to Rs. 2,47,955/- u/s 271(1 )(c) of the Act is not excigible in law, as the appellant has neither concealed particulars of income and nor furnish inaccurate particulars of income. 2.1. That the Hon'ble Commissioner of Income-tax (Appeals) grossly erred in facts and in law, in sustaining the penalty levied u/s 271(1 )(c) of the Act amounting to Rs. 2,47,955/- failing to appreciate that the notice issued u/s 274 r.w.s. 271 of the Act for initiating penalty for conc....
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....e Act does not specify the specific charge. For the sake of clarity, the notice dated 21.12.2016 is reproduced herein below: "F. No. ITO/WARD-3(3)/2016-17/ Dated: 21.12.2016 NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX 271(1) (c) M/s. Ashoka Machine Tools International Pvt. Ltd. B-68/3, Wazirpur Industrial Area, Delhi 110052 In the course of proceedings before the AO for the assessment year 2009-10 it appears to me that you:- have concealed the particulars of your income or furnished inaccurate particulars ....
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....he Act narrates that the penalty was leviable under section 271(1)( c ) of the Act for concealment of income and furnishing of inaccurate particulars thereof. In this fact situation we shall refer to the decisions relied upon by the Ld. AR. 7. In the case of CIT vs Manjunatha Cotton & Ginning Factory; 359 ITR 565 (Kar),vide paragraph 60, the Hon'ble Karnataka High Court has held as follows: "60. Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings ....
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....ng the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable." 8. In Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 taxman.com 241 (Kar) the Hon'ble Karnataka High Court Considered the question of law as to,- "Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?....
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....al basing on the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory (supra) and SSA's Emerald Meadows (supra) wherein it was held that the notice issued by the learned Assessing Officer would be bad in law if it did not specify under which limb of section 271(l)(c) of the Act the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars thereof. Relevant observations of the Hon'ble High Court read that,- "21. The Respondent had challenging the upholding of the penalty imposed under section 271(l)(c) of the Act, which was accepted by the ITAT. It followed the decision of Karnataka High Court in C....