TaxTMI 
TaxTMI 
2026 (2) TMI 144
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.... dated 31.03.2017 of Dy. CIT-5(1) Bhopal M.P. which is hereinafter referred to as the "Impugned Penalty Order." 2.2 Further as & by way of an assessment order made u/s 143(3) of the Act, the total income of the assessee was computed & assessed at Rs. 37,02,430/-. The total income as per the return of income was at Rs. 16,60,780/-. The addition of Rs. 20,41,650/- was made by adopting a net profit rate of 8% which was found to be reasonable basis para 4 of the aforesaid assessment order which we reproduce as below:- "4. It is pertinent here to mention that the assessee had also been assessed on the basis of best judgment for the A.Y. 2009-10. The Hon'ble CIT(A)-11, Bhopal had adopted a net profit rate of 8% in the case of the above assessee. The CIT(A)-II. Bhopal has found 8% N.P. in case of the assessee to be reasonable. The assessed as well as the revenue were in appeal against the order of the CIT(A)- 11, Bhopal. However the Hon'ble ITAT, Indore has confirmed the appellate order of the CIT(A), In case of the present assessment proceedings the material facts are similar and there is no reason why the net profit approved by the two appellate authorities in the ca....
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....it is a fit case or concealment of income as no details were produced at the time of assessment proceedings. As far as lack of opportunities is concerned, the AO had issued a notice on 20.03.2017 to the appellant during the penalty proceedings to which the appellant did not file any response. The AO has clearly mentioned in the penalty order that the there was concealment of income in this case. Further, the case laws relied upon by the appellant are either irrelevant or different from the facts of this case and hence, no applicable in the instant case 5.6 In view of the above discussion and following the decision of Hon'ble ITAT in appellant's own case, I hereby confirm the penalty levied by the AO. There is no point to deviate from the AO's finding which has already been upheld by the two authorities on the very same issue with similar facts. Accordingly, appeal is dismissed. 6. In the result, the appeal is dismissed." 2.4 The assessee being aggrieved by the "Impugned Order" has preferred the instant second appeal before this Tribunal & has raised the following grounds of appeal in the Form No. 36 against the "Impugned Order" which are as under:- ....
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....submitted that in the impugned penalty order & so also in the "Impugned Assessment Order" the material ingredients of section 271(1) are not stated. It it not known to the assessee as to whether which limb of section 271(1) is attracted/invoked. It was submitted that it is incumbent upon the department to state expressly both in notice as well as order as to whether the assessee has "concealed the particulars of his income or "furnished in accurate particulars of such income". Nothing is stated either about "concealment of income" or about "furnishing in accurate particulars of such income". It was submitted that it is incumbent upon the authorities to state in the notice as to whether "charge of concealment of income" is invoked or "charge of furnishing in accurate particulars" are invoked. In the absence, the notice u/s 271(1)(c) becomes defective & all the consequential orders flowing from it are bad in law & illegal. Basis three page written submission filed today which has a copy of notice dated 29.03.2013 it was submitted that there is not even a whisper about the "concealment of income" or "furnishing of inaccurate particulars of income" with in the meaning of section 271(1)....
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....a clear & express finding as to whether the assessee is held liable for "concealment of income" or for "furnishing inaccurate particulars". In the "Impugned penalty order" of Ld. Assessing Officer it is finally held as under "considering the facts & circumstances of the case I levy penalty of Rs. 6,50,000/- only u/s 271(1)(C) of the Act. In the ultimate analysis it is not held that penalty is levied for concealment of income or for furnishing inaccurate particular. 4.4 Further we observe that in the written submission dated 12.01.2026 [a three pages one] a notice dated 28.03.2013 is attached & in that also it is not stated expressly as to penalty is proposed to be levied u/s 271(1)(C) for concealment of income or for submitting inaccurate particular of income. The allegation with regard to imposition of penalty in the said show cause notice dated 28.03.2013 is not express. Further even in the show cause notice dated 23.02.2016 page 14 of PAPER BOOK by follow up the allegation on concealment of income or for submitting inaccurate particular of income are not expressly. Stated & avered. We therefore hold that even notice(s) dated 28.03.2013 & 23.02.2016 by virtue of which the asse....
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....the imposition of penalty is illegal in as much as vague and cryptic show-cause notice was issued to the assessee under Section 274 of the Act of 1961, without making him aware of the specific charge levied against him and, therefore, in view of the decision of the Karnataka High Court in the case of CIT V/s. Manjunatha Cotton Ginning Factory, (2013) 359 ITR 565 (Kar), the penalty so imposed by the Assessing Officer deserve to be deleted. 6. The learned Tribunal relying on the decision of the Apex Court in the case of National Thermal Power Co. Ltd. V/s. CIT, (1998) 229 ITR 383 (SC) permitted the assessee to raise the additional ground as there is pure question of law and no further inquiry or investigation on facts is required. It was submitted before the Tribunal that the income shown in the return were offered under Section 132 (4) as well as returns filed under Section 153A. These incomes have been accepted in the assessment order without any variation and objection. The blanket penalty proceedings were initiated in all cases under Section 271(1)(c). The penalty notice under Section 274 read with Section 271(1)(c) were issued in the typed format without striking off ei....
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....nation 5A to Section 271(1)(c), it was held by the Karnataka High Court that the show-cause notice under Section 274 was defective as it does not spelled out the ground on which the penalty is sought to be imposed and consequently penalty imposed was cancelled. The decision of CIT V/s. Manjunatha Cotton Ginning Factory (supra) was further followed by the Karnataka High Court in the case of CIT V/s. SSA'S Emerald Meadows, (2016) 73 taxman.com 248 (SC) / dated 23.11.2015 (ITA 380/2015), the High Court has dismissed the appeal of the revenue by observing that the Tribunal has allowed the appeal of the assessee holding that the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Act of 1961 was bad-in-law as it did not specify which limb of Section 271(1)(c) of the Act of 1961, the penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars. The Tribunal while allowing the appeal of the assessee, had relied on the decision of the Division Bench of Karnataka High Court decision in the case of CIT V/s. Manjunatha Cotton Ginning Factory (supra). It is further pointed out ....