TMI Blog2016 (3) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the CIT(A)-30 Mumbai, in relation to the penalty proceedings under section 271(1)(c) for the assessment year 2008-09. 2. At the outset, it has been admitted by both the parties that, so far as a Departmental appeals in ITAs No. 6330/Mum/2012 and 6328/Mum/2012, the tax effect is below 10 lakhs and accordingly, in view of the latest CBDT Circular No. 21 of 2015. These appeals are not maintainable. 3. After going through the disputed issue and the quantum of penalty, which has been challenged by the revenue in the grounds of appeal, we find that the tax effect in the impugned appeals of the revenue is less than ₹ 10 lakhs and hence, same are not maintainable. Now, in the wake of CBDT s Circular No. 21 of 2015 dated 10.12.2015, the monetary limit prescribed for filing of appeal before the Tribunal has been extended upto ₹ 10 lakhs. Further it has also been clarified that this circular will apply on pending appeals also which is evident from para 10 of the impugned Circular, which reads as under:- 10. This instruction will apply retrospectively to pending appeals to be filed henceforth in High Courts/Tribunals. Pending appeals below the specified tax limi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come and for furnishing inaccurate particulars of taxable income . Thereafter, a notice under section 274 r.w.s. 271 was issued. In the penalty proceedings, in response to the notice the assessee submitted his detailed explanation and submissions which has been incorporated by the AO from pages 2 to 6 of the penalty order. However, the AO rejected the assessee s contention and levied the penalty at ₹ 15 lakhs for concealing the particulars of income, which was far more than the minimum penalty which was sought to be evaded by the assessee. 8. Before us, qua the legal issue raised in the additional grounds the Ld. Counsel submitted that, firstly, in the assessment order, the AO has not framed any specific charge, on which he intends to impose penalty, he has mentioned under both the charges, which cannot be the case, because both the charges in penalty operates in two different fields. Secondly, he submitted that, in the notice issued under section 274 r.w.s. 271, the AO has not satisfied himself and has not struck off the particular charge, that is, penalty sought to be imposed is whether on concealment of income or for furnishing of inaccurate particulars of income. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d also perused the impugned orders qua the preliminary objection raised by the Ld. Counsel before us. As stated above, the AO in the assessment order had initiated the penalty proceedings under section 271(1)(c) for both the charges, that is, for the concealment of the income and for furnishing the inaccurate particulars of income . Thus, while making addition in the assessment order, the charge framed by the AO for initiating the proceedings was on both the counts that is, he was not sure under which charges penalty is to be imposed. At the stage of issuance of notice under section 274 r.w.s. 271 also, the AO did not specify at all, under which charge he is contemplating to initiate or impose the penalty. Finally, in the penalty order, he has levied the penalty for concealing the particular of taxable income within the meaning of section 271(1)(c) r.w. Explanation 1 . Section 271(1)(c) envisages that, if the AO in the course of any proceedings is satisfied that any person has concealed the particulars of its income or has furnished inaccurate particulars of income, then he shall be liable for penalty. The satisfaction of the AO at the time of initiation in the course of the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty 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 form 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 presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l 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 inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxmn 156, 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 . P) Notice under section 274 of the Act should specifically state the grounds mentioned i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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