TMI Blog2018 (4) TMI 441X X X X Extracts X X X X X X X X Extracts X X X X ..... angalore dated 28/6/2010 levying penalty of ₹ 18,00,000/- u/s 271(l)(c) of the Income-tax Act, 1961 (in short 'the Act') for asst. year 2004-05. 2.1 Aggrieved by the order of the CIT(A)-6, Bangalore dated 31/10/2013 for asst. year 2004-05 upholding the levy of penalty of ₹ 18 lakhs u/s 271(1)(c) of the Act, the assessee has preferred this appeal raising the following grounds:- 1. The order of the learned Commissioner of Income Tax (Appeals) (CIT(A)) in upholding the levy of penalty of ₹ 18,00,000/- u/s. 271 (1) (c) of the Act is opposed to law, facts and circumstances of the case. 2. The learned IT(A) ought to have appreciated that there is neither concealment nor furnishing of inaccurate particular income by the appellate assessee and therefore, the penalty u/s 27 1(1) (c) could not have been imposed. 3. The learned CIT(A) ought to have appreciated that the explanation of the appellate assessee was bonafide and therefore, the penalty u/s 271(1) (c) could not have been imposed. 4. The learned CIT(A) ought to have appreciated when there was no seized materials contemplated u/s 132 in the case of the appellate assessee, there coul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... root of the matter and can be decided on the basis of material already on record. Following the ratio of the decision of the Hon ble Apex Court in the case of NTPC Ltd; (Supra), we admit the additional ground (Supra) for adjudication. 3 Ground No: 2 3.1 In this ground (Supra), the sum and substance of the assessee s contentions are that the penalty proceedings initiated by the AO for asst. year 2004-05 vide notice issued u/s 274 r.w.s 271 of the Act dated 31/12/2009 for levy of penalty u/s 271(1)(c) of the Act, is defective. In this regard the ld AR for the assessee has placed reliance on the decision of the Hon ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (359 ITR 565) (Kar) and the rejection of the Revenue s SLP by the Hon ble Apex Court in the case of SSAS Emerald Meadows in SLP: (CC 11485/2016) dated 5/8/2016. The ld AR also placed reliance on the decision of the coordinate bench of this Tribunal in the following cases of - (1) C Ramaiah Reddy in ITA No.977/Bang/2017 dated 22/9/2017 and (ii) Arun Kumar in ITA No.117/Bang/2016 dated 16/12/2106 in support of the assessee s case. It is contended that in similar circumstances, as in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e extracted hereunder:- 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 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-I or in Explanation- l(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 oil 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(I)(c) c/a not exist as such he is not liable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ith reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent 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 M4NU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO IvL4RKETING reported in 171 Taxman 156, has held that penalty has to be clear as to the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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