TaxTMI 
TaxTMI 
TaxTMI 
2024 (5) TMI 433
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....eal with the validity of notice issued u/s 274 of the Act, wherein irrelevant portion of the notice has not been struck off. 3. Common facts of the case except figures are that t he assessee is an individual. In this case the assessment was completed u/s 144 r.w.s 147 of the Act. Enquiries into the assessee's banking transaction revealed that assessee had generated income out of business chargeable to tax but no return of income was filed. Hence, the case was reopened u/s 147 of the Act and notice u/s 148 was issued. The assessee did not comply with the notice. With no return filed, the information brought on record by the Investigation Unit being the statement recorded u/s 131 was relied upon wherein the assessee had admitted undisclosed gross receipts of Rs. 39,24,520/- on which total income offered to tax for A.Y.2013-14 was quantified at Rs. 4,65,688/- and assessment completed ex-parte. However, penalty proceedings were initiated u/s 271(1)(c) of the Act for concealment of income and a penalty of Rs. 2,87,800/-was imposed. Against this assessee went in appeal before ld. CIT(A) who has confirmed the order of ld. AO. Against this assessee is in appeal before us. Similar is t....
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....hich has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision 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 law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds wh....
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.... of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind." The final conclusion of the Hon&....
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....the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. 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 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 to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. ....
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....venue, when the notice was not in substance and effect in conformity with or according to the intent and purpose of the Act. In our view, the notice issued by the Assessing Officer was not in substance, and effect in conformity with or according to the intent and purpose of the Act, since the Assessing Officer did not specify the charge for which penalty proceedings were initiated and further there was non- application of mind on the part of the Assessing Officer. 4.7. For the reasons given above, we hold that levy of penalty in the present case cannot be sustained. Accordingly, we quash the penalty order in all these cases. Since we have quashed the penalty orders itself, we refrain from going into the merit in sustaining the penalty by NFAC. Accordingly, appeals of the assessee in ITA Nos.998 to 1001 & 1144/Bang/2023 are allowed. ITA No.1002/Bang/2023 (AY 2017-18): 5. Facts of the issue are that Assessee is a dealer in construction materials like Sand, Jelly, and Mud etc. Assessee in order to purchase the materials goes to Lorry Yards, where the materials filled Lorries are stationed. After purchasing the materials are sent to the customer's places either in the same vehi....