9911796707
TMI Blog2019 (8) TMI 354X X X X Extracts X X X X X X X X Extracts X X X X ..... dings u/s 271(1)(c) of the Income Tax Act, 1961; in short of 'the Act'. Heard both the parties. Case file perused. 2. The assessee's sole substantive grievance raised in the instant appeal(s) challenges correctness of both the lower authorities action imposing the penalty in issue of Rs.6,70,345/- and Rs.7,66,229 u/s 271(1)(c) of the Act. It emerges from the relevant penalty notice(s) dated 30.03.2017 & 19.03.2013 that the Assessing Officer did not specify as to whether the assessee is accused of concealment of particulars of any taxable income or it had furnished inaccurate particulars of such income. This tribunal's co-ordinate bench's decision in Nishith Kumar Jain Vs. ACIT in ITA 961-964/Kol/2013 decided on 10-02-2016 has deleted an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id decision will squarely apply and all the orders imposing penalty have to be held as bad in law and liable to be quashed. 9.2. The Hon'ble Karnataka High Court in the case of CIT & Anr. v. Manjunatha Cotton and Ginning Factory (supra) has laid down the following principles to be followed in the matter of imposing penalty u/s.271(1)(c) of the Act. "NOTICE UNDER SECTION 274 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ffences, that is to say, 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 sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, 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 MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as "concealment of income" and "furnishing of incorrect particulars" would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
