TMI Blog2016 (12) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... ecifically. Otherwise, the 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. Thus penalty deleted - Decided in favour of assessee - ITA No. 333 & 334/JP/2015 - - - Dated:- 9-11-2016 - SHRI BHAGCHAND, ACCOUNTANT MEMBER For The Assessee : Shri Vijay Goyal and Shri Gulshan Agarwal, CA For The Revenue : Shri R.A. Verma, Addl.CIT-. DR ORDER PER BHAGCHAND, AM Both these appeals have been filed by the assessee against separate orders of the ld. CIT(A), Alwar dated 24-02-2014 for the assessment year 2004-05 2005-06 raising therein following grounds:- On the facts and in the circumstances of the case and in law the ld. CIT(A) erred in confirming the imposition of penalty u/s 271(1)( c) imposed by AO amounting to ₹ 1,36,145/- for the assessment year 2004-05 and ₹ 2,01,825/- for the assessment year 2005-06 respectively without appreciating the full facts of case and submission of the assessee during the course of appeal proceedings. 2.1 Brief facts of the case are that the assessee is an individual and derives income from interest inclu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2007) 298 ITR 244 (SC)). The assessee thus concealed income of ₹ 4,53,819/- for which provision of Section 271(1) of the Act are applicable. A penalty of ₹ 1,36,145/- is levied under aforesaid provision which is calculated as under:- 1. Tax on assessed income of ₹ 6,18,980 (as per order u/s 143(3)/154 dated 21-02-2011 ₹ 1,59,694/- 2. Tax on income excluding concealed income ₹ 23,548/- 3. Quantum of tax sought to be evaded (1-2) ₹ 1,36,145/- 4. Minimum penalty imposable 100% ₹ 4,08,435/- 5. Maximum Penalty imposable 300% ₹ 1,36,135/- 2.2 Being aggrieved, the assessee carried the matter before the ld. CIT(A) who confirmed the penalty of ₹ 1,36,135/- u/s 271(1)(c) of the Act by observing as under:- 4.6 Having considering the material available on record, I find that it is not disputed that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in return filed u/s 153A of the Act and additions sustained solely for the reason that the same was not declared in the income tax return filed u/s 139(1) of the I.T. Act, 1961. The AO initiated penalty proceedings u/s 271(1) of Act in the assessment order dated 9-12-2010 on the additional income surrendered in the153A return by mentioning that penalty proceedings u/s 271(1) of the Act are initiated for concealment of income/ filing of income. Further in the penalty notice u/s 274 read with Section 271 of I.T. Act, annexed with the assessment order the AO mentioned that whereas in the course of assessment proceedings before me for the A.Y. 2004-05, it appears to me that as per Section 274 read with Section 271(1) of the I.T. Act, you are liable for penalty for concealment of income/ furnishing inaccurate particulars of income. Thus the penalty proceedings were initiated without specifying the limb for reasons in the penalty notice to impose the penalty i.e. whether the penalty was initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. Therefore, the initiation and imposing of penalty proceedings is wrong, bad in law ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conditions mentioned in section 271 should be made known about the grounds on which they intend imposing penalty on him as section 274 makes it clear that the 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 grounds mentioned in section 271 are mentioned would not satisfy the 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 per cent. to 300 per cent. 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, the 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. It is also noted that similar type of issue was decided in favour of the assessee by ITAT Coordinate Bench in the case of Shankar Lal Kh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the stage of initiation of penalty proceedings, the order passed by the Assessing Officer need not reflect satisfaction vis a vis each and every item of addition or disallowance if the overall sense gathered from the order is that a further prognosis is called for. It would be sufficient compliance with the law that there is a prima facie evidence for concealment of particulars of income or furnishing inaccurate particulars of income. Even after this section, the Assessing Officer has to satisfy the particular limb of initiation of penalty imposable U/s 271(1)(c) of the Act at the time of assessment proceedings. The Hon ble Karnataka High Court in the case of CIT vs. M/s Manjunatha Cotton Ginning Factory Ors.(2013) 359 ITR 565 (Karn) held that sending printed form where all the grounds mentioned in section 271 would not satisfy the requirement of law. The assessee should know the ground which he has to meet specifically, otherwise, the principle of natural justice is offended on the basis of such proceedings, no penalty could be imposed to the assessee. The Hon ble Punjab Haryana High Court in the case of Tej Bhan Cotton Ginning Pressing Factory Vs. CIT, Rohtak (supra) h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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