TaxTMI 
TaxTMI 
2017 (4) TMI 1590
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....investment and dealing in shares and derivatives, filed its return of income for A.Y. 2005-06 on 31.10.2005 declaring income of NIL after set of brought forward loses and paid taxes on book profit of Rs. 3,45,02,979 u/s 115 JB of the Act. The case was taken up for scrutiny and the assessment was completed under section 143(3) of the Act vide order dated 29.11.2007 wherein the assessment was completed on book profit of Rs. 4,25,77,068 and income under normal provison at Rs. 14,89.774 after making additions /disallowance with reference to which penalty u/s 271(1)(1)(c) of the Act was ordered to be initiated. On appeal, Ld. CIT(A) upheld the additions /disallowance against which the assessee had preferred appeal before Hon'ble ITAT. Since the ....
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..../CA of the assessee at the time of filing the return of income and disclosed by the assessee suo-motto during the course of assessment proceedings. The reasons given by him for doing so are wrong contrary to the facts of the case and against the provisions of law. 4. The above ground are without prejudice to each other. 5. The appellant craves leave to add to, alter, amend, delete and / or modify the above grounds of appeal on or before the, final date of hearing. 5. In the course of hearing on 8.03.2017, the learned A.R. for the assessee brought to the notice of the Bench that the assessee, vide letter dated 06.03.2017, had filed additional grounds of appeal. The additional grounds raised reads as under: - Wit....
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.... 4.2 We have heard the rival contentions on the issue of admission of additional ground raised by the assessee (supra) and considered the material on record in this regard. We find that the additional ground raised by the assessee is a purely legal ground and since the same goes to the very root of the matter regarding the levy of penalty under section 271(1)(c) of the Act, we therefore admit the same for consideration and adjudication in this appeal. 4.3 Alongwith the application for admission of additional grounds, the assessee has also filed a copy of the notice issued under section 274 r.w.s. 271 of the Act dated 29.11.2007 for initiating of the penalty proceedings under section 271(1)(c) of the Act for A.Y. 2005-06. A perusal of t....
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....rovision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of ....
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....posed, 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 one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with r....
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....tandard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." The conclusion drawn therein by their Lordships at para 63 thereof and particularly at p) to s) thereof are as under: - "63 ..................................... a) ..................................... p) Notice under section 274 of the Act should specifically state the ground mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has ....