Contact us   Feedback   Annual Subscription   New User   Login      
Tax Management India .com
TMI - Tax Management India. Com
Extracts
Home List
← Previous Next →

2016 (10) TMI 415 - ITAT KOLKATA

2016 (10) TMI 415 - ITAT KOLKATA - TM - Levy of Penalty u/s. 271(1) (c) - validity of notice - Held that:- In the present case, the notice dt. 30-3-2005 issued to Assessee by the AO U/Sec 274 r/w 271 of the Act does not show on which ground the penalty is sought to be imposed, therefore we hold that the order dt: 30-3-2012 levying penalty is not valid. See CIT & Anr. v. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT ] - Decided in favour of assessee - I.T.A. No. 2 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

c) of the I.T. Act, 1961. 2. The brief facts of the case are that the assessee is a partner of M/s. Mondal & Bros, Maa Kamakhya Tyres and M/s. Radha Rani Market, besides above, the assessee has also involved in supply business. The assessee filed his return of income by declaring his income at ₹ 1,87,850/- on 25-02-2003. The AO determined the total income of assessee at ₹ 4,87,850/- by an order u/s. 143(3) on 30- 03-2005. During such proceedings, the AO found that the assessee h .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sessee confirmed the imposed penalty. Aggrieved, the assessee is in appeal before us by raising the fol lowing additional grounds:- 1. That the order dt. 31.03.2012 passed u/s. 271(1) ( c) of the Income Tax Act, 1961 is barred by l imitation as per Sec. 275(1) (c) of the Act. Hence, the penalty order is bad in law & need to be quashed. 2. That the penalty order dt. 31.03.2012 passed u/s. 271(1) of the Income Tax Act, 1961, without issuing any notice of hearing to the assessee, is bad in law .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the order of the Tribunal in the case of Suvaprasanna Bhattacharya Vs. ACIT, Cir-55, Kolkata dated 06-11-2015 in ITA No. 1303/Kol/2010 for the AY 2006-07, which considered decision of the Hon ble Karnataka High Court supra and passed detailed order on the said issue. On the contrary, the Ld. DR has relied on the orders of the lower authorities. 4. Heard the rival submissions and perused the material available on record. The question before us is as to whether the penalty order passed by the AO a .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

resaid decision will squarely applicable to the present case and all the orders imposing penalty have to be held as bad in law and liable to be quashed. 5. As rightly pointed out by the Ld.AR, this Tribunal in the case of Suvaprasanna Bhattacharya supra by an order dated 06-11-2015 considered the Judgment of Hon ble Karnataka High Court supra the relevant portion of which reproduced hereunder: 8. The next argument that the show cause notice u/s.274 of the Act which is in a printed form does not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Karn), has held that notice u/s. 274 of the Act should specifically state as to whether penalty is being proposed to be imposed for concealment of particulars of income or for furnishing inaccurate particulars of income. The Hon ble High court has further laid down that certain printed form where all the grounds given in section 271 are given would not satisfy the requirement of law. The Court has also held that in .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the Act. NOTICE UNDER SECTION 274 59. As the provision stands, the penalty proceedings can be initiated on various ground 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 said order which contains the satisfaction of the authority which has passed the order. However, if the .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 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% .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e. 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 satisfaction of the existence of the grounds mentioned in Sect .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

nalty 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. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was impose .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

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 inc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

o 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 lia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e facts set out in Explanation 1(A) & (B) it should be discernible from the said order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the assessment order. l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee fails to prove that the explanation offered is not bona fide, an order imposing penalty could be passed. m) If the explanation off .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

hority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of 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 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 



|| Home || Acts and Rules || Notifications || Circulars || Schedules || Tariff || Forms || Case Laws || Manuals ||

|| About us || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members || Site Map ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version