TMI Blog2016 (9) TMI 796X X X X Extracts X X X X X X X X Extracts X X X X ..... s not sustainable in the eyes of law. We accordingly set aside the order of the CIT(Appeals) as well as the Assessing Officer and delete the penalty on account of wrong initiation of penalty proceedings. - Decided in favour of assessee - ITA Nos.1812 & 1844/Bang/2013 - - - Dated:- 29-7-2016 - SHRI SUNIL KUMAR YADAV, JUDICIAL MEMBER AND SHRI A.K. GARODIA, ACCOUNTANT MEMBER For The Appellants : Shri Mayank Jain, Advocate For The Respondent : Dr.Sibichen K. Mathew, CIT-III(DR) ORDER Per Sunil Kumar Yadav, Judicial Member These appeals are preferred by the assessees against the separate orders dated 24.09.2013 of the CIT(Appeals)-VI, Bangalore for the A.Y. 2006-07 confirming the penalty levied u/s. 271(1)(c) of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal ground in ITA No.1812/Bang/2013 and at pages 23 24 of the compilation filed in ITA No.1844/Bang/2013 with the submission that the Assessing Officer did not specifically mention in the notice as to whether it is for concealment of income or furnishing of inaccurate particulars of such income. Sending printed form where all the grounds in section 271(1)(c) are specified would not satisfy the requirements of law. Therefore, in the light of these facts, initiation of penalty proceedings is not in accordance with law and deserves to be annulled. In support of his contention, the ld. counsel for the assessee placed reliance upon the judgments of the Hon'ble jurisdictional High Court in the case of CIT Anr. V. Manjunatha Cotton Ginn ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law. Before laying down the parameters, Their Lordships have analysed the provisions of section 274 for sending notices and for initiating proceedings u/s. 271(1)(c). The relevant observations of Their Lordships are extracted hereunder for reference:- 59. As the provision stands, the penalty proceedings can be initiated on various grounds 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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 sustained in law. It is needless to point out the satisfaction of the existence of the grounds mentioned in section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined onl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 [2007] 292 ITR 11 (SC) at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of Manu Engineering Works reported in [1980] 122 ITR 306 (Guj) and the Delhi High Court in the case of CIT v. Virgo Marketing P. Ltd. reported in [2008] 171 Taxman 156, has held that levy of penalty has to be clear as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under which limb of the penalty u/s.271(1)(c) of the Act is to be levied; i.e. whether the penalty proceedings are being initiated for concealment of particulars of income or for furnishing of inaccurate particulars of income. Such initiation of penalty proceedings has been held to be illegal by the Hon ble High Court of Karnataka in the case of Manjunatha Cotton Ginning Factory (supra). Following the aforesaid decision of the Hon'ble High Court of Karnataka in the case of Raveendhiraa L Others (supra), we hold that the notices issued under Section 274 rws 271 of the Act dt.29.12.2011 for Assessment Years 2007-08 to 2009-10 are bad in law for the reasons mentioned in the aforesaid orders and consequently hold the penalty orders pas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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