TMI Blog2019 (1) TMI 351X X X X Extracts X X X X X X X X Extracts X X X X ..... Shri Jason P Boaz, Accountant Member For the Assessee : Ms. Mrinalini, Advocate For the Revenue : Smt. Vikas K. Suryawamshi, Addl. CIT ORDER PER SHRI JASON P BOAZ, A.M. : This appeal by the assessee is directed against the order of CIT(A), Hubli dated 15.06.2017, upholding the levy of penalty of ₹ 9,81,000/- u/s 271(1)(c) of the Income Tax Act, 1961 (in short the Act ) for Assessment Year 2012-13. 2. Briefly stated, the facts relevant for disposal of this appeal are as under: 2.1 The assessee, engaged in real estate business, filed her return of income for Assessment Year 2012-13 on 17.09.2012 declaring total income of ₹ 3,25,110/-. The return was processed u/s 143(1) of the Act. On 19.02.2013, in the course of survey u/s 133A of the Act conducted at the business premises of the assessee s husband Shri. K. M. Sayyed at Gadag and Koppal, it was found that the assessee along with her husband was constructing a lodge building which was at completion stage. On the basis of books impounded, it was ascertained that the actual investment in construction of the lodge building was ₹ 2,41,20,000/-, whereas the explained sources of invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax (Appeals) ought to have granted an opportunity before dismissing the appeal on limitation. 2. The Appellant submits that she has shifted are residence to Koppal and there was some delay in getting the order copy enabling to contact the consultant at Gadag to file an appeal and the Appellant entertained a belief that the delay would be explained at the time of hearing. 3.3 In support of the additional ground raised (Supra) the learned AR of the assessee submitted that the said ground is a pure legal ground that goes to the root of the matter and can be decided on the basis of material already on the records. According to the assessee the omission to raise specific grounds to this effect was neither intentional nor deliberate and prayed that the additional ground raised be admitted for adjudication in the interest of equity and justice. In this regard reliance was placed on the decision of the Hon ble Apex Court in the case of NTPC Ltd., Vs. CIT (229 ITR 383) (SC). 3.4 We have heard the rival contentions and perused and carefully considered the material on record and the legal precedents in this regard. In our view the legal issue in the additional ground raised ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 of the Act is not fatal to the sustainability of the order imposing penalty. 4.3.1 We have heard the rival contentions and perused and carefully considered the material on record; including the judicial pronouncements cited. At the outset we may mention that while the aforesaid issue of defective notice was not before the ld CIT(A), however, since the facts of the matter on this issue are apparent from the copy of the said notice issued u/s 274 r.w.s 271 of the Act dated 30/03/2015 and the judicial view of Courts and ITAT co-ordinate benches in the matter (Supra) in our view, no useful purpose would be served in restoring the matter to the file of the ld CIT(A). We have perused the copy of the notice issued u/s 274 r.w.s 271 of the Act; dated 30/03/2015 and find that it reveals that the AO has not deleted the inappropriate words and parts in the relevant paragraph of the notice, whereby it is not clear as to which default has been committed by the assessee; i.e., whether it is for furnishing of inaccurate particulars of income or concealing particulars of income that penalty u/s 271(1)(c) of the Act is sought to be levied. 4.3.2 The Hon ble Karnataka High Court in the ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ay, 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 confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the order of co-ordinate bench of this Tribunal, cancelling the penalty levied on the 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. In view of the aforesaid decisions of Hon ble Karnataka High Court holding the ground (Supra), the decision cited by the ld DR in the case of P.M. Abdullah (supra) would not come to Revenue s rescue as in our considered opinion the same is contrary to the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory (supra). 4.3.4 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 30/03/2015 for initiating penalty proceedings for asst. year 2012-13 is invalid and therefore, the penalty proceedings conducted in pursuance thereof, are also invalid. We, therefore, delete the penalty le ..... X X X X Extracts X X X X X X X X Extracts X X X X
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