Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Home Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles News Highlights
Extracts
Home List
← Previous Next →

Girdhari Ishwarlal Chhablani Versus Income Tax Officer, Ward – 8 (1) , Pune

2017 (1) TMI 1034 - ITAT PUNE

Levy of penalty u/s. 271(1)(c) - invalid notice - Held that:- In view of the fact that the notice issued for levy of penalty u/s. 271(1)(c) is ambiguous and vague and does not specify the charge for levy of penalty, the same is held to be bad in law and hence the subsequent proceedings arising there from are vitiated. The impugned order is set aside and the appeal of the assessee is allowed. - ITA No. 2089/PUN/2012 - Dated:- 18-1-2017 - SHRI R.K. PANDA, AM AND SHRI VIKAS AWASTHY, JM For The Asse .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

assessee filed his return of income for the assessment year 2007-08 on 31-10-2007 declaring total income of ₹ 4,57,030/-. A survey u/s. 133A of the Act was carried out on the business premises of Chhablani Group on 24-08-2009. During the course of survey the assessee voluntary declared ₹ 43,00,000/- as additional income for assessment year 2007-08 and offered the same for tax by way of revised return of income filed on 29-09-2009. The Assessing Officer vide order dated 07-12-2010 acc .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ner of Income Tax (Appeals) vide impugned order rejected the contentions of the assessee and confirmed the order levying penalty u/s. 271(1)(c) of the Act. Now, the assessee is in second appeal before the Tribunal. 3. Shri Rajiv Thakkar appearing on behalf of the assessee submitted that the order levying penalty is bad in law as there was no concealment of income or furnishing of inaccurate particulars of income in the return filed by the assessee. The revised return filed by the assessee was ac .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ecify the charge for which the penalty proceedings are initiated. The Assessing Officer has not struck off the irrelevant parts of the proforma notice. It is a well settled law that notice issued without specifying the charge for levy of penalty is not sustainable and the subsequent proceedings arising therefrom are liable to be set aside. In support of his submissions the ld. AR placed reliance on the decision of Hon ble Karnataka High Court in the case of Commissioner of Income Tax Vs. SSA S E .....

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 ld. DR submitted that a perusal of the impugned order confirming the penalty u/s. 271(1)(c) of the Act would clearly shows that penalty has been levied for concealment of income. The ld. DR contended that the assessee declared additional income only because of survey action. If survey action wouldn t have been carried out the additional income declared by the assessee would have escaped tax net. 5. We have heard the submissions made by the representatives of rival sides and have perused 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

. A perusal of the notice reveal that irrelevant parts of the notice has not been struck off. Thus, the notice does not clearly specify whether the penalty u/s. 271(1)(c) has been levied for concealment of income or furnishing of inaccurate of particulars of income. The Hon ble Karnataka High Court in the case of Commissioner of Income Tax Vs. Manjunatha Cotton and Ginning Factory reported as 359 ITR 565 has held that, when the Assessing Officer proposes to invoke the first limb being concealmen .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

where all the grounds for levy of penalty u/s. 271(1)(c) are mentioned would not satisfy requirement of law. The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice would be offended. On the basis of such proceedings, no penalty could be imposed on the assessee. 6. The Co-ordinate Bench of the Tribunal in the case of Kanhaiyalal D. Jain Vs. The Asstt. Commissioner of Income Tax in ITA No. 1201 to 1205/PN/2014 for the assessment years 2003- .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s laid down the proposition that the Assessing Officer is to be satisfied in the course of proceedings that there is either concealment of income or furnishing of inaccurate particulars of income under clause (c) to section 271(1) of the Act. It has been categorically held that concealment of income and furnishing of inaccurate particulars of income are different. The Hon ble High Court has thus, laid down that the Assessing Officer while issuing notice has to come to conclusion that whether it .....

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 notice has to be appropriately marked. Similarly, for furnishing inaccurate particulars of income, the standard proforma without striking of relevant clauses, as per the Hon ble High Court would lead to inference as to non-application of mind. 16. Further, the Hon ble Karnataka High Court in CIT Vs. SSA S Emerald Meadows (supra) has dismissed the appeal of Revenue, where the Tribunal had allowed the appeal of assessee holding that the notice issued by the Assessing Officer under section 274 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

n Sanjog Tarachand Lodha Vs. ITO (supra) have applied the ratio laid down by the Hon ble Karnataka High Court (supra) and held that where there is no striking off of either of limbs, then notice issued under section 274 r.w.s. 271(1)(c) of the Act was invalid and subsequent penalty proceedings were held to be vitiated. The Co-ordinate Bench further held : 23. However, the question which is raised before us by way of additional ground of appeal is root of start of the proceedings i.e. recording o .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

gainst additional income offered by the assessee is incorrect. Further, where the assessee is not aware of exact charge against him, the ambiguity in the notice issued under section 274 r.w.s. 271(1)(c) of the Act by not striking of portion which is not applicable, prejudice the right of reasonable opportunity to the assessee, as he was not made aware of exact charge he had to face. It is a clear-cut case of concealment since the assessee had offered additional income pursuant to search carried .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ake the assessee fully aware of exact charge of the Department against him. As pointed out, in present case, in the assessment order itself while recording satisfaction for initiating proceedings under section 271(1)(c) of the Act, exact charge of the Department against the assessee is not clear. The Assessing Officer records the satisfaction for initiating penalty proceedings on both the counts i.e. concealment of income and furnishing of inaccurate particulars of income. The Hon ble Bombay Hig .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

itiation of penalty proceedings are vitiated and the same are to be quashed. The issue of notice under section 274 of the Act on such vagueness and ambiguity makes such notice invalid and proceedings thereafter are to be quashed. 25. The Hon ble Supreme Court in T. Ashok Pai Vs. CIT (supra) had held as under:- 23. Section 271(1)(c) remains a penal statute. The rule of strict construction shall apply thereto. The ingredients for imposing penalty remain the same. The purpose of the Legislature tha .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Forum
what is new what is new
  ↓     bird's eye view     ↓  


|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

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

Go to Mobile Version