2017 (3) TMI 1581 - AT - Income Tax

Penalty u/s 271(1)(c) - whether when substantial question of law has been framed and admitted, therefore, the issue has become debatable, therefore, penalty is not leviable? - Held that:- The Hon’ble jurisdictional High Court in CIT Vs Smt. Kaushalya (1995 (1) TMI 25 - BOMBAY High Court) while dealing with the similar ground about the limb of charge, whether mere mistake in language used or mere not striking off of inaccurate portion cannot by itself invalidate notice issued under section 274 of the Act. The language of the section does not speak about the issuance of notice. All that is required is that the assessee be given an opportunity of show cause. The issuance of notice is an administrative device for informing the assessee about the proposal of levy of penalty in order to enable him to explain why it should not be levied against him. If it is taken for the sake of argument that mere mistake in the language in the notice for non-striking off of ‘inaccurate particular’ or marking on ‘concealment of income’ portion cannot by itself invalidate the notice. Entire facts and backgrounds thereof are to be kept in mind. Every concealment of fact may ultimately result in filing of or furnishing inaccurate particular. It was further argued that no statutory notice has been prescribed in this behalf in the Income tax Act.

The judgment of Hon’ble Jurisdictional High Court in CIT Vs Kaushalya (supra) is still having a binding force on us. Thus, with utmost regards to the judgment of Karnataka High Court in CIT Vs Manjunatha Cotton & Ginning Factory (2013 (7) TMI 620 - KARNATAKA HIGH COURT ) we are bound to follow the judgment of jurisdictional High Court in CIT Vs Kaushalya (supra). - Decided against assessee.

Penalty u/s 273 - assessee contended that no section was mentioned in the penalty order, therefore, the penalty has to be deleted - Held that:- On perusal of the notice issued u/s 273 r.w.s 274, (page-35 of the paper book), it was fairly agreed by the ld. counsel for the assessee that section 273(2)(b) of the Act has been mentioned in the aforesaid notice. Since, we have deliberated upon the facts/case laws in detail, while deliberating/adjudicating the appeals of the assessee u/s 271(1)(c) of the Act in earlier paras of this order, therefore, considering the elaborate discussion made therein and the factual matrix available on record, on identical reasoning, we find that the assessee neither paid the advance tax nor filed the estimate of advance tax payable in terms of section 209A of the Act, the assessee failed to fulfill the statutory obligation. The original return was accepted u/s 143(1) of the Act and as a result, effectively, the subsequent assessment is the only assessment in the case of the assessee. Even bona-fide belief is not borne out of facts. Considering the totality of facts, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal), thus, these appeals are also dismissed.