Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

Shri B.L. Dasraj Urs, M/s. Sri Nimishamba Stationery Versus The Income Tax Officer, Ward 2 (2) , Mysore.

2015 (9) TMI 547 - ITAT BANGALORE

Penalty u/s. 271(1)(c) - vlidity of notice u/s. 274 - unaccounted sales - entire sale value was treated as income of the Assessee and brought to tax rejecting assessee contention that only the gross profit on these unaccounted sales can be added as income of the Assessee and not the entire sales - Held that:- On the facts of the present case that the show cause notice u/s. 274 of the Act is defective as it does not spell out the grounds on which the penalty is sought to be imposed.

F .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

cided in favour of assessee. - ITA Nos. 850 to 853/Bang/2014 - Dated:- 26-8-2015 - SHRI N.V. VASUDEVAN AND SHRI ABRAHAM P. GEORGE, JJ. For The Appellant : Shri G. Venkatesh, Advocate For The Respondent : Shri Sunil Kumar Agarwala, Jt. CIT(DR) ORDER Per Bench These are appeals by the Assessee against a common order dated 25.10.2013 of CIT(A), Mysore, relating to assessment years 2004-05 to 2007-08. 2. In all these appeals, the assessee has challenged the order of the CIT(Appeals) confirming the o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

he name of the Assessee were found. The transaction entries in this bank accounts were not recorded in the books of accounts maintained by the Assessee for AY 2004-05 to 2007-08. The Assessee explained that the bank accounts evidence unaccounted sales. The Assessee claimed that only the gross profit on these unaccounted sales can be added as income of the Assessee and not the entire sales. The claim of the Assessee was not accepted by the Revenue authorities and the entire sale value was treated .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Tribunal. 5. We have heard the submissions of the ld. counsel for the assessee and the ld. DR. Several technical objections with regard to validity of the order passed u/s. 271(1)(c) of the Act were raised by the assessee. The ld. counsel for the assessee submitted before us that the show cause notice issued u/s. 274 of the Act does not specify as to whether penalty proceeding is being initiated for concealing particulars of income or furnishing inaccurate particulars of income or for any other .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

being proposed to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of income. The Hon ble High court has further laid down that certain printed form where all the grounds given in section 271 are given would not satisfy the requirement of law. The Court has also held that initiating penalty proceedings on one limb and find the assessee guilty in another limb is bad in law. It was submitted that in the present case, the aforesaid decision will squarely .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

be followed in the matter of imposing penalty u/s.271(1)(c) of the Act. 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 satisfacti .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lty 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 pre .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rticulars of income or furnishing inaccurate particulars of income. No doubt, the facts of some cases may attract both the offences and in some cases there may be overlapping of the two offences but in such cases the initiation of the penalty proceedings also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

swer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 nonapplication of mind. 9. The final conclusion of the Hon ble Court was as follows:- 63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ence of the conditions mentioned in Section 271(1)(c), at least the facts set out in Explanation 1(A) & (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

enalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the assessment order. l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that the explanation offered is not bonafide, an .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version