TMI Blog2017 (1) TMI 1163X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. Commissioner of Income Tax (Appeals), Central-I, Kolkata dated 10.09.2013 for the assessment year 2008-09, whereby he confirmed the penalty of ₹ 3,20,444/- imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. 2. The assessee in the present case is an individual, who is carrying on the business of jewellery in the name and style of his proprietary concern M/s. Bidhan Jewellers. The said concern belongs to Bidhan Jewellers Group . A search and seizure action under section 132 was conducted on 08.01.2010 as well as on subsequent dates. Pursuant to the search, a notice under section 153A was issued by the Assessing Officer and in response to which, the return of income was filed by the assessee on 31.10.2011 declaring total income of ₹ 40,63,220/- as against the income of ₹ 31,37,220/- declared in the return of income originally filed under section 139(1) on 20.03.2009. In the assessment completed under section 143(3) read with section 153A vide an order dated 27.12.2011, the total income of the assessee was determined by the Assessing Officer at ₹ 40,79,980/-. Penalty proceedings under section 271(1)(c) were also initiat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce of any specific mention in the show-cause notice issued under section 274 of the Act for the year under consideration by the Assessing Officer as to whether the asseessee is guilty of having furnished inaccurate particulars of income or of having concealed particulars of such income , the initiation of penalty proceedings itself was bad in law and the penalty order passed in pursuance thereof is liable to be quashed being invalid. He has invited our attention to the show-cause notice issued by the Assessing Officer for the year under consideration under section 274 in the printed form to point out that the irrelevant portion, viz. furnished inaccurate particulars of income or concealed particulars of such income was not struck off by the Assessing Officer. Although the ld. D.R. has contended in this regard that the relevant portion in the penalty notice having been ticked by the Assessing Officer, it is clear that the other charge was not invoked by him and there was thus no infirmity in the notice issued by the Assessing Officer under section 274 as alleged by the ld. Counsel for the assesese, it is observed that the Coordinate Bench of this Tribunal in the case of Suvap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ategorically 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 existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that 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 farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... quent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the 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 income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear 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 conce ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd 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 offered, even though not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority 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 grounds which h ..... 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