TMI Blog2019 (1) TMI 350X X X X Extracts X X X X X X X X Extracts X X X X ..... RNATAKA HIGH COURT] held that the assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice is offended. - Decided in favour of assessee. - M.P No.24/Bang/2017 (In ITA No.860/Bang/2012) - - - Dated:- 4-1-2019 - Shri N.V Vasudevan, Vice President And Shri Jason P Boaz, Accountant Member For the Appellant : Ms. Vani H, Advocate For the Respondent : Shri Siddappaj, Addl. CIT ORDER PER SHRI JASON P BOAZ, ACCOUNTANT MEMBER : This Misc. application filed by the assessee is in respect of the Tribunals order in ITA No.860/Bang/2012 dated 13/4/2015, wherein the levy of penalty u/s 271(1)(c) of the Income-tax Act, 1961 (in short the Act ) on the assessee for asst. ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ITA No.860/Bang/2012 dated 13/1/2015, also heard and dismissed the assessee s appeal against levy of penalty u/s 271(1)(c) of the Act for asst. year 2006-07 in ITA No.859/Bang/2012. The assessee filed an M.P No.62/Bang/2015 before the Tribunal for asst. year 2006-07 which was rejected vide order dated 20/1/2016. Against this order of the Tribunal, the assessee preferred an appeal before the Hon ble Karnataka High Court in ITA No.251/Bang/2016 and the Hon ble Court in its order dated 21/9/2016 held that the notice issued in penalty proceedings us/s 271(1)(c) of the Act ought to have been examined and considered in the light of its decision in the case CIT Vs. Manjunatha Cotton Ginning Factory (2013) 359 ITR 565 (Kar). 2.3 The facts for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the AO u/s 274 r.ws 271 of the Act for initiation of penalty proceedings u/s 271(1)(c) of the Act for asst. year 2007-08 dated 24/12/2009. (copy of the aforesaid notice placed on record) has also been carefully perused and we find that the AO has not deleted the inappropriate words and facts in the relevant paragraph of the notice; whereby it is not clear as to which default is committed by the assessee, i.e whether it is for furnishing of inaccurate particulars of income OR concealing particulars of income that the penalty u/s 271(1)(c) of the Act is sought to be levied. 3.2 The Hon'ble Karnataka High Court in the case of M/s Manjunatha Cotton Ginning Factory in (359 ITR 565) (Kar) has held that a notice issued u/s 274 r.ws 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions stipulated in Section 271 (I)(c) c/a not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of tax liability. As the said provisions have to be held to be standby construed notice issued under Section 274 should satisfy the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended if the show cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee. 60. Clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with 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 to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e basis of the defective notice issued by the AO. Revenue's SLP filed against he said judgment of the Hon'ble High Court in the case of SSAS Emerald Meadows (Supra) has also been dismissed by the Hon'ble Apex Court in CC/1485/2016 dated 5/8/2016. 3.4 Respectfully following the judgments of the Hon'ble Karnataka High Court in the cases of M/s Manjunatha Cotton Ginning Factory (359 ITR 565) (Kar) and SSAS Emerald Meadows in ITA No.380 of 2015 dated 23/11/2015, we hold that the notice issued by the AO u/s 274 r.w.s 271 of the Act dated 24/12/2009 for initiating penalty proceedings for asst. year 2007-08 is invalid and consequently, the penalty proceedings conducted in pursuance thereof, are also invalid and we therefore de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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