TMI Blog2019 (2) TMI 904X X X X Extracts X X X X X X X X Extracts X X X X ..... e case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee. - I.T.A. No. 562/(Asr)/2015, I.T.A. No. 531/(Asr)/2015 - - - Dated:- 14-2-2019 - Sh. N. S. Saini, Accountant Member And Sh. N. K. Choudhry, Judicial Member For the Appellant : Sh. R.K.Sarna, AR For the Respondent : Shri Bhawani Shankar, DR ORDER PER N.S. SAINI, AM: These cross appeals preferred by the Revenue and assessee are directed against the Order by the Commissioner of Income Tax (Appeals)-2, Jalandhar dated 19.8.2015. 2. The sole issue involved in these appeals is that the CIT(A) erred in partly confirming the levy of penalty u/s 271(1)(c) of the I.T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he consideration in kind. The total consideration was thus ₹ 1,83,75000/-. The AO was of the opinion that since the assessee had not invested the net consideration in the purchase of the new assets nor placed such consideration in the capital gain scheme as per sub section (4) to section 54 of the Act, the entire capital gain arising from the assets from the transfer of land had escaped assessment. Therefore, he issued notice u/s 148 of the Act and made addition of the capital gains of ₹ 1,83,75,000/- in the hands of the assessee. 4. On appeal, the Ld. CIT(A) dismissed the appeal of the assessee. 5. On further appeal, before the Tribunal, the Amritsar Bench of the Tribunal confirmed the findings of the AO. 6. Thereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , penalty levied by the AO on this amount cannot be sustained. However, the assessee has not disclosed any Long Term Capital Gains either in original return or in the return filed in response to the notice u/s 148 of the Act, therefore, penalty levied by the AO on Long Term Capital Gains of ₹ 33 lacs is upheld. 8. Being aggrieved by the said order of the CIT(A), both the assessee and Revenue is in appeal before us. 9. Before us, Ld. AR of the assessee filed copy of the notice dated issued u/s 274 of the Act. We find that the notice dated 22.12.2010, issued u/s 274 read with section 271(1)(c) of the I.T. Act, 1961 reads as under:- Whereas in the course of proceedings before me for Assessment Year 2007-08 it appears to me tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71(1)(c) of the Act carry different meanings. Therefore, it was imperative for the Assessing Officer to strike - off the irrelevant limb so as to make the assessee aware as to what is the charge made against him so that he can respond accordingly. The Hon'ble Karnataka High Court in the case of Manjunatha Cotton Ginning Factory, 359 ITR 565 (Kar) observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
