TMI Blog2019 (4) TMI 1026X X X X Extracts X X X X X X X X Extracts X X X X ..... cision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee. - ITA No.1777/Bang/2018 - - - Dated:- 16-4-2019 - Shri N. V. Vasudevan, Vice President And Shri Jason P Boaz, Accountant Member For the Assessee : Shri. Narendra Sharma, Advocate For the Revenue : Shri. T. Chandrasekhar, Addl. CIT ORDER PER SHRI JASON P BOAZ, A.M. : This appeal by the assessee is directed against the ex-parte order of CIT(A)-3, Bangalore, dated 01.03.2018 upholding the levy of penalty of ₹ 1,75,000/- under section 271(1)(c) of the Income Tax Act, 1961 (in short the Act ) in Assessment Year 2005-06. ORDER ON PETITION FOR CONDONAITON OF DELAY IN FILING APPEAL BEFORE TRIBUNAL 2. At the outset, the learned AR for the assessee submitted there was a delay of 19 days in filing this appeal before the Tribunal and an Affidavit sworn to by the assessee dated 24.05.2018 has been filed by the assessee along with the appeal. The learned AR prayed that the delay be condoned in keeping with the principles laid down by the H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and the appeal may kindly be admitted and disposed off on merits for the advancement of substantial cause of Justice. 2.2 The learned DR for Revenue opposed the assessee s plan for condonation of delay. 2.3 We have heard and considered the rival contentions and the material on record in respect of the matter of condonation of delay of 19 days in filing this appeal before the Tribunal. Taking into account the principles laid down by the Hon ble Apex Court in the case of MST Katiji and Others (supra), wherein the Hon ble Apex Court laid down the principles for dealing with matters relating to condonation of delay, and the reasons of health issues cited by the assessee in the Affidavit (supra), we are of the view that the assessee was prevented by reasonable and sufficient cause from filing the appeal for Assessment Year 2005-06 on time. In this view of the matter and respectfully following the principles laid down by the Hon ble Apex Court in the case of MST Katiji and Others (supra), we condone the delay of 19 days by the assessee in filing this appeal before the Tribunal and accordingly admit the assessee s appeal for Assessment Year 2005-06 for consideration and adjudicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty and therefore, the penalty levied u/s.271[1][c] of the Act requires to be cancelled. 4. Without prejudice to the above, the penalty levied is highly excessive and liable to be reduced substantially. 5. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 4.2 The assessee also filed the following additional grounds of appeal: 1. The order of penalty passed u/s 271[1][c] of the Act is bad in law as the notice issued under section 274 rws 271 of the Act is not discernable as to whether the penalty proceedings is initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and in the circumstances of the appellant's case and therefore, the impugned order passed deserves to be cancelled. 2. For the above and other grounds that may be urged at the time of -earing of the appeal, your appellant humbly prays that the appeal may be -.,,lowed and Justice rendered. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ble Karnataka High Court (supra), the orders levying penalty u/s 271(1)(c) of the Act for Assessment Year 2005-06 in the case on hand is liable to be quashed / cancelled. 5.2 Per contra, the learned DR for Revenue placed reliance on the orders of the authorities below as being in order. 5.3.1 We have heard and carefully considered the rival contentions and submissions on record and the decision of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory (Supra). The notice issued by the AO u/s 274 r.ws 271 of the Act dated 26.03.2007 for initiation of penalty proceedings u/s 271(1)(c) of the Act for Assessment Year 2005-06 in the case on hand (copy filed by the learned AR), has been carefully perused and we find that the AO has not deleted the inappropriate words and portions 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. 5.3.2 The Hon'ble Karnataka High Court in the case of M/s Manjunatha Cotton ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ars 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 initiation of penalty proc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rdinate bench of this Tribunal, cancelling the penalty levied on the basis of the defective notice issued by the AO. Revenue's SLP filed against the 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/I485/2016 dated 5/8/2016. 5.3.4 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 26.03.2007 for initiating penalty proceedings for Assessment Year 2005-06 is invalid and consequently, the penalty proceedings conducted in pursuance thereof, are also invalid. We therefore cancel the penalty levied u/s. 271(1)(c) of the Act for Assessment Year 2006-06. Consequently, ground No.2 raised by the assessee is allowed. 6. In view of our finding rendered in respect of Additional Ground Nos.1 and 2, the other grounds of appeal at grounds 1 to 5 (supra) raised by the assessee on merits of the levy of penalty become academic in nature and do not require ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
