TMI Blog2016 (6) TMI 360X X X X Extracts X X X X X X X X Extracts X X X X ..... cts and circumstances under which the penalty was imposed on the assesee are as follows :- The Assessee is an individual. The assessee owned a property namely 36 98, Gorakshabasu road, Dum Dum, Kolkata. It was a bustee which was in adverse possession of anti-social elements. There was no income for several years in the past from this property. In A.Y.2007-08, in the assessment completed under the Income Tax Act, 1961, the value of the property was considered as nil and accepted in the assessment completed for that year. During the previous year relevant to A.Y.2008-09 the assessee negotiated sale of this property and was successful in selling the property to Housing Development Board, Govt. of West Bengal. The property was conveyed under 17 deeds of conveyance for a total consideration of ₹ 1,30,47,125/-. The deed of conveyance was executed on 16.07.2007 and on that date the assessee received a sum of ₹ 83,16,000/-. Since the property was sold during the previous year 2008-09 for a sum of ₹ 1,30,47,125/- the AO was of the view that there was taxable wealth for A.Y.2007-08 under the Act. Therefore proceedings u/s 17 of the Act were initiated against the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8(2) being defective and the consequent imposing of penalty is not legal. So far as the merits of the submissions made by the ld. Counsel for the assessee is concerned we find from the show cause notice that the AO has not even indicated the section under which penalty is sought to be levied on the assessee. The show cause notice also does not indicate as to whether penalty was sought to be levied on the assessee for concealing or furnishing inaccurate particulars of net wealth. The show cause notice is given as an annexure to this order. This Tribunal in the case of Suvaprasanna Bhattacharya vs ACIT (supra) took the following view on valid point of penalty when the show cause notice contains similar defect. The following were the relevant observations :- 8. The next argument that the show cause notice u/s.274 of the Act which is in a printed form does not strike out as to whether the penalty is sought to be levied on the for furnishing inaccurate particulars of income or concealing particulars of such income . On this aspect we find that in the show cause notice u/s.274 of the Act the AO has not struck out the irrelevant part. It is therefore not spelt out as to whether th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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 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 assessee guilty of another offence or finding him guilty for either the one or the other cannot be susta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 pro forma without striking of the relevant clauses will lead to an inference as to non-application of mind. 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 element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellate Authority or Revisional Authority. f) Even if there is no specific finding regarding the existence of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as concealment of income and furnishing of incorrect particulars would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reasses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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