TMI Blog2013 (11) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... nishing inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in [1978 (9) TMI 18 - GUJARAT High Court] and the Delhi High Court in the case o VIRGO MARKETING reported in [2008 (1) TMI 15 - HIGH COURT, DELHI], 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 - Penalty should be clear as to the limb for which it is levied and the position being unclear here the penalty is not sustainable - Ground raised by the assessee should be allowed on technical grounds – Decided in favor of Assessee. - I.T.A. No.4625/M/2013 to I.T.A. No.4630/M/2013 - - - Dated:- 11-10-2013 - SHRI D. KARUNAKARA RAO AND SHRI AMIT SHUKLA, JJ. For the Appellant : Shri Rajeev Khandelwal Mr. Neelkanth Khandelwal For the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee except seeking adjournments. In such circumstances, CIT (A) came to the conclusion that the assessee is not interested to pursue his case and therefore, dismissed the appeals for AYs under consideration for want of prosecution. Expectedly the CIT(A) has not adjudicated the penalty appeals on its merits. Aggrieved with the decision of the CIT (A), assessee filed the present appeals before the Tribunal by raising the above mentioned ground. 5. During the proceedings before us, Shri Rajeev Khandelwal, Ld Counsel for the assessee mentioned that these appeals can be disposed off without remanding them to the CIT(A) on the preliminary issue relating to satisfaction of the AO on the issue of initiation of penalty proceedings and without going into the merits of the penalty. In this regard, Ld Counsel brought our attention to last paragraph of the assessment order and mentioned that the penalty proceedings were initiated for furnishing inaccurate particulars of the income . (para 6 of the assessment order is relevant in this regard). Similar language i.e., furnishing of the details was reiterated in the body of the assessment order also. There is no appeal by the assessee aga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the levy of the penalty has to be clear as to the limb of which it is levied and the position being unclear, penalty is not sustainable. 8. On the other hand, Ld DR argued vehemently stating that on merits, this is the case of section 132 of the Act, where the assessee offered additional income by way of filing of return consequent to the notice u/s 153A of the Act. The additional income was not originally filed u/s 139(1) of the Act, therefore, on merits the penalty is sustainable. However, on the legal proposition enunciated by the Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra), ld DR has nothing to offer. 9. We have heard both the parties and perused the orders of the Revenue Authorities as well as the judgments cited by the Ld Counsel. On the preliminary issue, we find that the Tribunal can adjudicate the appeals on the grounds of legal arguments without going into the merits of the penalties levied by the AO in all these years. Admittedly, this is the case, where there was an operation u/s 132 of the Act and the additional income was offered by the assessee and disclosed in the return in response to section 153A of the Act for all the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reason of the penalty, the notices were issued. The above documents reveal that the penalty proceedings were initiated for failure to furnish inaccurate particulars of income and however, the penalty was levied for concealment of income . 12.1. In this regard, we have perused the said praras 59 to 61 of the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra) and the same read as under: NOTICE UNDER SECTION 274 59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which 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 nat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 reference to the information, facts arid materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61 The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment 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 furnish ..... X X X X Extracts X X X X X X X X Extracts X X X X
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