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

Deutsche Bank AG Versus The Assistant Director of Income Tax (International Taxation) 1 (2) , Mumbai

2018 (1) TMI 397 - ITAT MUMBAI

Penalty levied u/s. 271(1)(c) - Assessing Officer did not strike off and specify the charge/limb for which he is proposing to initiate penalty proceedings - Held that:- The notice issued by the Assessing Officer u/s. 274 r.w.s. 271(1)(c) of the Act is on account of non-application of mind and therefore on this account itself the penalty imposed u/s.271(1)(c) is liable to be deleted. Thus, we direct the Assessing Officer to delete the penalty levied u/s.271(1)(c) of the Act. See Orbit Enterprises .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

and 2001-02 in sustaining the penalty levied u/s. 271(1)(c) of the Act. 2. At the outset the Ld. Counsel for the assessee submits that initiation of penalty proceedings u/s. 271(1)(c) of the Act is improper. Ld. Counsel for the assessee submits that the Assessing Officer is not clear as to the charge for which the penalty is initiated i.e. either concealment of income or furnishing inaccurate particulars. Ld. Counsel for the assessee referring to Assessment Order submits that Assessing Officer .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

specify the charge for which the penalty proceedings were initiated. Ld. Counsel for the assessee submits that the notice has been issued without specifying the charge for which the penalty is initiated as there is no striking off of the limb in the notice and therefore the initiation itself is improper and not valid. He placed reliance on the decision of the Coordinate Bench in the case of Meherjee Cassinath Holdings v. ACIT in ITA.No. 2555/Mum/2012 dated 28.04.2017. 4. Ld.DR strongly placed r .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

sing Officer records that the penalty proceedings are initiated for furnishing inaccurate particulars of income. 6. An identical situation has been considered by the Coordinate Bench in Meherjee Cassinath Holdings v. ACIT (supra) as to whether the action of the Assessing Officer in initiating penalty proceedings u/s.271(1)(c) of the Act without striking off one of the limbs and without specifying the specific charge in the notice initiating penalty proceedings for inaccurate particulars of incom .....

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 charge and the assessee is not made aware as to which of the two limbs of section u/s. 271(1)(c) of the Act he has to respond. While holding so the Coordinate Bench observed as under: - 8. We have carefully considered the rival submissions. Sec. 271(1)(c) of the Act empowers the Assessing Officer to impose penalty to the extent specified if, in the course of any proceedings under the Act, he is satisfied that any person has concealed the particulars of his income or furnished inaccurate par .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lment of the particulars of income and furnishing of inaccurate particulars of income referred to in Sec. 271(1)(c) of the Act denote different connotations. In fact, this distinction has been appreciated even at the level of Hon'ble Supreme Court not only in the case of Dilip N. Shroff (supra) but also in the case of T.Ashok Pai, 292 ITR 11 (SC). Therefore, if the two expressions, namely concealment of the particulars of income and furnishing of inaccurate particulars of income have differe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

rd and the learned representative canvassed that the same has been issued by the Assessing Officer in a standard proforma, without striking out the irrelevant clause. In other words, the notice refers to both the limbs of Sec. 271(1)(c) of the Act, namely concealment of the particulars of income as well as furnishing of inaccurate particulars of income. Quite clearly, non-striking-off of the irrelevant limb in the said notice does not convey to the assessee as to which of the two charges it has .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

graphs were to be deleted, but the same had not been done. Thus, the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or he had furnished inaccurate particulars. Even before us, the learned Additional Solicitor General while placing the order of assessment laid emphasis that he had dealt with both the situations. 84. The impugned order, therefore, suffers from non-application of mind. It was also bound to comply with th .....

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 case of M/s. SSA s Emerald Meadows (supra) and against such a judgment, the Special Leave Petition filed by the Revenue has since been dismissed by the Hon'ble Supreme Court vide order dated 5.8.2016, a copy of which is also placed on record. 10. In fact, at the time of hearing, the ld. CIT-DR has not disputed the factual matrix, but sought to point out that there is due application of mind by the Assessing Officer which can be demonstrated from the discussion in the assessment order, wh .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

by the Assessing Officer. Since the factual matrix in the present case conforms to the proposition laid down by the Hon'ble Supreme Court, we proceed to reject the arguments advanced by the ld. CIT-DR based on the observations of the Assessing Officer in the assessment order. Further, it is also noticeable that such proposition has been considered by the Hon'ble Bombay High Court also in the case of Shri Samson Perinchery, ITA Nos. 1154, 953, 1097 & 1126 of 2014 dated 5.1.2017 (supr .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ument set-up by the ld. CIT-DR and find that a similar issue had come up before our coordinate Bench in the case of Dr. Sarita Milind Davare (supra). Our coordinate Bench, after considering the judgment of the Hon'ble Bombay High Court in the case of Smt. Kaushalya & Ors., (supra) as also the judgments of the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra) and Dharmendra Textile Processors, 306 ITR 277 (SC) deduced as under :- 12. A combined reading of the decision rende .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

d the penalty since the basis for the penalty proceedings disappeared when it was held that there was no suppression of income. The Hon ble Kerala High Court has struck down the penalty imposed in the case of N.N.Subramania Iyer Vs. Union of India (supra), when there is no indication in the notice for what contravention the petitioner was called upon to show cause why a penalty should not be imposed. In the instant case, the AO did not specify the charge for which penalty proceedings were initia .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t non-application of mind in the case of Kaushalya (supra) and observed as under:- ....The notice clearly demonstrated non-application of mind on the part of the Inspecting Assistant Commissioner. The vagueness and ambiguity in the notice had also prejudiced the right of reasonable opportunity of the assessee since he did not know what exact charge he had to face. In this back ground, quashing of the penalty proceedings for the assessment year 1967-68 seems to be fully justified. In the instant .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lowing the decision of our coordinate Bench in the case of Dr. Sarita Milind Davare (supra), we hereby reject the aforesaid argument of the ld. CIT-DR. 13. Apart from the aforesaid discussion, we may also refer to the one more seminal feature of this case which would demonstrate the importance of non-striking off of irrelevant clause in the notice by the Assessing Officer. As noted earlier, in the assessment order dated 10.12.2010 the Assessing Officer records that the penalty proceedings u/s 27 .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ng Officer and there is no clear and crystallised charge being conveyed to the assessee u/s 271(1)(c), which has to be met by him. As noted by the Hon'ble Supreme Court in the case of Dilip N. Shroff (supra), the quasi-criminal proceedings u/s 271(1)(c) of the Act ought to comply with the principles of natural justice, and in the present case, considering the observations of the Assessing Officer in the assessment order alongside his action of non-striking off of the irrelevant clause in 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

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| 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