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The Manjri Stud Farm Pvt Ltd. Versus The Asstt. Commissioner of Income Tax, Circle 2, Mumbai

2017 (9) TMI 1101 - ITAT MUMBAI

Addition u/s 271(1)(c) - validity of notice - without specifying the specific charge under which the penalty is proposed - Held that:- It is mandatory on the part of the AO to point out the specific charge and strike off one of the two charges contained in the notice issued u/s 271(1)(c) r.w.s. 274 falling which the proceedings u/s 271(1)(c) and consequent order were to be quashed. CIT V/s Manjunath Cotton and Ginning Factory reported in [2013 (7) TMI 620 - KARNATAKA HIGH COURT] held that the AO .....

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VIR SINGH, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Shri J D Mistri, Sr.Advocate For The Revenue : Shri Suman Kumar ORDER PER RAJESH KUMAR, A. M: The captioned is appeal by the assessee pertaining to assessment years 2006-07. The appeal is directed against the order of the CIT(A)-5, Mumbai, dated 12.12.2013 which in turn has arisen from an order passed by the Assessing Officer dated 29.3.2012 under section 271(1)(c) of the Act. 2. The sole ground raised by the assessee is against the conf .....

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,19,714/- out of expenses claimed under the income from house property. In the assessment order, the penalty proceedings u/s 2721(1)(c) of the Act was initiated separately for furnishing inaccurate particulars of income whereas in the notice issued under section 274 of the Act dated 12.3.2012, the AO stated that the assessee has furnished inaccurate particulars of income for which penalty proceedings u/s 271(1)( c ) of the Act were attracted. Finally, the AO imposed the penalty of ₹ 41,79, .....

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accepted during the assessment proceedings itself about wrong claim of the depreciation. The excess depreciation to the extent of ₹ 23,45,989/· was accordingly disallowed. On the issue of disallowance of ₹ 23,10,223/- on account of professional fee, the assessee though raised the-Issue bef1Jre'CIT(A) in quantum appeal, but did not press it for the reasons that in the' facts of:, the case deduction was not in accordance with the provision of the IT Act. Even if the iss .....

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laim also is not found bonafide. Mere assertion that it was inadvertent mistake is also not enough to absolve the assessee from levy of penalty. Thus keeping In view the ratio of decisions given In the aforesaid judgments. discussed in para 4.2 &: 4.3, it is held that the AO has rightly imposed penalty u/s 271 (1 )(e), however, the quantum of penalty needs to be recomputed onto the total amount of addition of ₹ 69,06,626/-. This would reduce the amount of penalty. The AO is directed to .....

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AO used the standard format for issuing show cause notice to the assessee. Thereafter the AO issued notice dated 12.3.2012 wherein again the AO stated that the penalty proceedings u/s 271(1)( c ) were attracted as the assessee has concealed the particulars of income or furnished the inaccurate particulars of income. The ld. AR finally submitted that in the order passed under section 271(1)(c) of the Act imposing the penalty, the AO again stated that explanation (1) to section 271(1)(c) was appli .....

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cisions namely CIT V/s Manjunath Cotton and Ginning Factory reported in 359 ITR 565(Kar), CIT V/s SSA s Emerald Meadows (SLP) (SC) 380 of 2015 of Karnataka High Court and CIT V/s Shri Samson Perinchery in 1154 of 2014 Bombay High Court. 7. On the other hand, the ld.DR relied on the orders of authorities below and also submitted that the objection specific charge raised by the ld.AR at this stage was never raised before the ld.CIT(A) or before the AO and therefore should not be entertained and th .....

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ulars of income by the assessee and ultimately the penalty was imposed by invoking the Explanation (1) to section 271(1)( c) of the Act. For the sake of convenience and ready reference we extract the two notices issued u/s 274 r.w.s. 271 (1)© of the Act as under: NOTICE U/S 274 R.W.S.271(1)( c ) OFTHE INCOME TAX ACT, 1961. No.ACIT/Cir 2(2)/271(1)( c )/2011-12 Office of the Asst.CIT Circle-2(2), 545, Aayakar Bhavan, M K Road. Mumbai-400020 (022-22077580) Date: 12.3.2012 The Principal Officer .....

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yakar Bhavan M K Road, Mumbai-20 on 16.3.2012 at 11.00 am and show cause why an order imposing a penalty on you should not be made under section 271(1)( c ) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)( c ). (R P Rastogi) ACIT Circle 2(2), Mumbai. We also reprodu .....

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failed to furnish me return of income which you were required to furnish by a notice given under section 22(1)/22(2)/34 of Indian Income Tax Act, 1922 or which you were required to furnish under section 139(1) or by a notice given under section 139(2)/148 of the Income Tax Act, 1961, No.........dated....or have without reasonable cause failed to furnish it within time allowed and the manner required by he said section 139(1) or by such notice. Have without reasonable cause failed to comply with .....

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person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)( c ). Asstt.Comm.of Income Tax -2(2), Mumbai. 9. We find merit in the arguments of the ld.AR that it is mandatory on the part of the AO to point out the specific charge and strike off one of the two charges contained in the notice issued u/s 271(1)( c ) r.w.s.274 falling which the proceedings u/s 271(1)( c ) of the Act a .....

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