TMI Blog2016 (8) TMI 1158X X X X Extracts X X X X X X X X Extracts X X X X ..... ceedings - Decided in favour of assessee. - ITA No. 938/Mum/2015 - - - Dated:- 10-8-2016 - Mahavir Singh (Judicial Member) For the Appellant : Satish Mody, AR For the Respondent : Manoj Kumar, Sr. DR ORDER Mahavir Singh (Judicial Member) This appeal by the assessee is arising out of order of CIT(A) in Appeal No. CIT(A)-41/IT-50/2012-13 dated 19-11-2014. Assessment was framed by DCIT-24(1), Mumbai for the assessment year 2009-10 u/s 143(3) of the Income Tax Act, 1961 (hereinafter the Act ) vide his order dated 15-11-2011. Penalty under dispute was levied by DCIT-24(1), Mumbai u/s. 271(1) ( c) of the Act vide his order 01-05-2012. 2. The only issue in this appeal of assessee is against the order of the CIT(A) co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is 100% of the tax sought to be evaded and the maximum penalty leviable is ₹ 30,11,409/-, which is 300% of the tax sought to be evaded. Aggrieved, the assessee preferred appeal before the CIT(A), who also confirmed this action of the AO by a cryptic order. Aggrieved, the assessee is in second appeal before the Tribunal. 4. Before me, the ld. counsel for the assessee stated that he has filed the explanation before the AO and the CIT(A) and also argued that in this case the AO has levied penalty for concealment u/s 271 (1) (c) of the Act, but without any specific charge i.e. the penalty for concealment of income or furnishing of inaccurate particulars of income. According to Ld. Counsel the AO himself is not convinced about t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... initiating the proceedings to issue notice to the assessee. When such a notice is issued, it is open to the assessee to contest the accusation against him that he has concealed income or he has furnished inaccurate particulars. As there is an initial presumption of concealment, it is for the assessee to rebut the said presumption. The presumption found in Explanation 1 is a rebuttable presumption. If the authority, after hearing the assessee and looking into the material produced in the said proceedings before him is satisfied that though the income is undisclosed there was no intent to avoid tax and therefore, if he holds there is no concealment of income, then question of imposing penalty would not arise. It may be a case of not disclosin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n a view in favour of the assessee and some High Courts and Tribunals have taken a view in favour of the Revenue and on legal advice if an assessee relies on the said legal position for not disclosing the income and for non-payment of tax, certainly, that is a fact which should weigh in the penalty proceedings after the assessee has paid tax with interest before imposing penalty. 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Clause (c) deals with two specific offences, that is to say, concealing particulars of income or furnishing inaccurate particulars of income. 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 Section 271(1)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be conf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 un ..... X X X X Extracts X X X X X X X X Extracts X X X X
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