TMI Blog2016 (5) TMI 1023X X X X Extracts X X X X X X X X Extracts X X X X ..... ar S. V, Advocate For The Revenue : Shri. Sunil Kumar Agarwala, JCIT ORDER PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : Assessee through this appeal assails levy of penalty u/s.271(1)(c) of the Income-tax Act, 1961 ( the Act in short), for the impugned assessment year, which was confirmed by the CIT(A) II, Bengaluru. 02. One of the grounds taken by the assessee states that the notice issued initiating the penalty proceedings suffer from incurable defect. In support of this, assessee has filed a copy of the notice dt. 30.03.2013, issued u/s.274 r.w.s.271 of the Act. 03. Per contra, Ld. DR submitted that the levy of penalty for the impugned assessment year was for concealment of income. Ld. DR submitted that assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to examine whether mandatory conditions for initiating the proceedings u/s 271(1)(c ) were complied with or not. What are the mandatory conditions for invoking the provision of sec.271(1)(c ) of the Act? One of the mandatory conditions is that he notice u/s 274 r.w.s. 271 must be valid notice. In view of the same, we proceed to adjudicate this ground of appeal. 16. As seen from the notice issued u/s 271(1)(c) of the IT Act, it is dated 29-03-2002 addressed to the assessee for the assessment year 1998-99. It is in the prescribed form with the blanks to be filled up by the relevant information. At the bottom of the notice on page-2, it is mentioned that inappropriate words and paragraphs are to be deleted. However, we find that the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued u/s 274, the 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(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 insec.271 should be made known about the grounds on which they intend imposing penalty on him as the sec.274 makes ft c/ear that assessee has a righ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a sine qua non for initiation or proceedings, the penalty proceedings should be confirmed only to those grounds and the said grounds have to be specifically stated to that the assessee would have the opportunity to met those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the AO proposes to invoke the first limb 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 17. We find that in the case before us also, the AO has not specified the relevant portion of the clause (c) for initiating penalty proceedings u/s 271(1)(c) of the IT Act and therefore, as held by the Hon ble High Court, the assessee could not have rebutted the initial presumptions for initiation of penalty which is serious in nature. Res ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
