TMI Blog2014 (11) TMI 1005X X X X Extracts X X X X X X X X Extracts X X X X ..... ars of income carry different connotations. The Gujarat 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 of VIRGO MARKETING [2008 (1) TMI 885 - DELHI HIGH COURT] 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. - Decided in favour of assessee. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gible business. Therefore, according to him, losses arising from such 80-IB projects should be adjusted against profits of 80-IB projects of earlier years. He, accordingly, disallowed the business loss of ₹ 6,06,33,060/- and added it to the returned income of the assessee and arrived at the total loss of ₹ 1,22,21,610/-. The assessee accepted such addition made by the AO and did not file any appeal. Thereafter, the AO initiated penalty proceedings u/s 271(1)(c) of the Act and levied the penalty at 100% of the tax sought to be evaded. Aggrieved, the assessee preferred an appeal before the CIT(A) who deleted the same and the Revenue is in appeal before us. 3. At the time of hearing on 30/10/2014, it was noticed that in For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to furnishing of any inaccurate particulars or concealment of income. He submitted that merely because the assessee has not filed any appeal against the disallowance made in the assessment order, it would not automatically attract levy of penalty. 4. Having regard to the rival contentions and the material on record, we find that the notice u/s 271(1)(c) dated 28/12/2011 has been issued to the assessee without striking off the inappropriate words thereby not specifying the default for which the proceedings were being initiated, making the notice invalid. The Hon ble High Court of Karnataka, in the case of M/s.Manjunatha Cotton and Ginning Factory in ITA No.2564 of 2005 dated 13-12-2012 has held as under: 59. As the provision st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause (c) deals with two specific offences, that is to say, concealing particulars 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 assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ition 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 furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
