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2017 (2) TMI 497 - ITAT KOLKATA

2017 (2) TMI 497 - ITAT KOLKATA - TMI - Penalty u/s 271(1)(c) - Held that:- A perusal of the notice demonstrated that the Assessing Officer has not specified as to which limb of section 271(1)(c) of the Act, the penalty proceedings had been initiated, i .e. , whether for concealment of particulars of income or furnishing of inaccurate particulars of income. - Decided in favour of assessee - I.T.A. No. 72/KOL/ 2014 - Dated:- 8-2-2017 - Shri J . Sudhakar Reddy, Accountant Member and Shri S.S.Viswa .....

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ad as follows:- (1) For that the penalty orders u/s 271(1)(c) of the I.T. Act, 1961 is void-ab-initio. The ld. AO had not recorded the reasons specifically while initiating it in assessment order. Therefore, the penalty is liable to be deleted. (2) For that the assessee during assessment proceeding accepted the addition made and as per the order u/s 143(3) of the Act agreed to pay the assessed tax of ₹ 19,35,458/- . The levy of the penalty u/s 271(1)(c) of the Act is unjustified and agains .....

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his concealment. The impounded documents were handed over during the time of assessment proceeding. Then the assessee was able to calculate and surrender the amount and he paid the tax accordingly. This fact was explained in all the forums. Hence, the penalty cannot be levied as the assessee discharged the primary burden by cogent explanation and the ld. AO was unable to revert the same. (5) For that the penalty u/s 271(1)(c) of the Act of ₹ 14,40,594/- is bad in law. 2. After hearing the .....

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me or furnishing of inaccurate particulars of income. The assessee rel ied on the order of the B Bench, Kolkata of this Tribunal in the case of Suvaprasanna Bhattacharya -vs.- ACIT, Circle-55, Kolkata in ITA No. 1303/KOL/2010 order dated 06.11.2015, where the decision of the Hon ble Karnataka High Court in the case of CIT -vs. - Manjunatha Cotton & Ginning Factory (2013) 218 Taxman 423 (Kar.) was followed. In this judgment at para 63, the Hon ble Karnataka High Court has held as follows: - ( .....

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uthority or Revisional Authority. (f) Even if there is no specific finding regarding the existence of the conditions mentioned in Section 271(l)(c), at least the 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 .....

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self would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it 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 fou .....

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iguity. (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(l)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particu .....

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from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. (u) The findings recorded in the assessment proceedings insofar as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assess .....

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