TaxTMI 
TaxTMI 
TaxTMI 
2025 (5) TMI 1716
X X X X Extracts X X X X
X X X X Extracts X X X X
....these transactions were not recorded in the regular books of accounts and the petitioner failed to disclose the same to the respondent Department for taxation. According to the petitioner, he is a salaried person and assessed his income tax for the assessment years 2006-07 & 2007-08 and filed income tax returns on 27.06.2006 & 30.07.2007 with admitted income of Rs. 16,98,710/- and 29,56,470/- respectively. The said accounts stand in the name of two trusts wherein, the petitioner was one of the beneficiaries. It was observed that certain transactions were carried out during period 01.04.2005 to 31.03.2007, which are pertaining to the assessment years 2006-07 & 2007-08. Therefore, the petitioner was issued with summons dated 29.08.2011 and the petitioner submitted his reply dated 13.09.2011, whereby, he admitted that he had and account in HSBC Private Bank and claiming ignorance, he stated that the said amounts lying to his credit, was prior to the assessment years 2006-07 & 2007-08 and hence, the same was not liable to tax. Further, he explained that these amounts were deposited from his father's account in the year 2002 and no further amounts were deposited by them in the said ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Tax. However, the Appellate Authority vide order dated 31.03.2015, dismissed the appeals. Aggrieved by the same, the petitioner preferred appeals vide ITA Nos.1302 & 1303 of 2015 before the Income Tax Appellate Tribunal. The Tribunal also, vide order dated 27.04.2016, confirmed the order of re-opening and the assessment order. Subsequent to the reassessment, the department initiated penalty proceedings for the assessment years 2006-07 and 2007-08 by issuing show cause notices to the petitioner. While that being so, the petitioner served with notice for prosecution under Section 276C(1) of the Act. The learned counsel further submits that subsequently, the assessment orders for the assessment years 2006-07 & 2007-08 were dropped by the Income tax authority vide order dated 05.06.2024.Therefore, the entire prosecution for the offence punishable under Section 276C(1) cannot be sustained as against the petitioner and liable to be quashed. 4. On the other hand, the learned counsel for the respondent would submit that the petitioner had carried out the transactions through an undeclared account maintained by him in Switzerland during the assessment years 2006-07 & 2007-08 and he conce....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ecision of the Hon'ble Karnataka High Court in the case of CIT v. Manjunatha Cotton and Ginning Factory reported in (2013) 359 ITR 565 (Kar) and the Department's SLP against it has been dismissed by the Hon'ble Supreme Court. We also find that Hon'ble Karnataka High Court in the case of CIT Vs. SSA's Emerald Meadows, reported in (2016) 73 taxmann.com 241 (Kar) endorsed the same view in Manjunatha Cotton and Ginning Factory (supra) and held as under:- 3. The Tribunal has allowed the appeal filed by the assessee holding the notice Income Tax Act, 1961 (for short 'the Act'), to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty 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 CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565/218 Taxman 423/35 taxmann.com 250(Kar). 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s to levy penalty; and since Imposing penalty Involves civil consequences (the expression civil consequences encompasses infraction of property/personal rights/civil liberties/material deprivation/pecuniary and non pecuniary damages), therefore, notice need to be given because sec.271(1)(c) of the Act specifically says about two distinct faults (1) concealment of the particulars of income (il) furnishing of inaccurate particulars of such income; and therefore, concept of reasonable opportunity guaranteed u/s. 274 of the Act would be illusory if specific charge on which penalty is proposed is not given by AO by way of issuing notice; and as noted above, the principles of natural justice is implied and notice need to be given to assessee before levy of penalty; and therefore, notice issued to assessee has to spell out the specific charge/fault which AO proposes to levy, and should not be vague and should not put the assessee guessing as to what is in the mind of the AO viz whether he proposes concealment of particulars of income or furnishing inaccurate particulars of Income. Therefore, the contentions of the Ld.DR cannot be accepted and is held to be devoid of merits and therefore r....