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TMI Blog2019 (8) TMI 1056X X X X Extracts X X X X X X X X Extracts X X X X ..... ion and thus the consequent penalty order deserves to be quashed. 4. That the penalty proceeding initiated u/s 271 (1) (c) of the Act in the assessment order or even vide notice dated 16/11/15 u/s 274 is contrary to the ratio laid down by the Hon'ble Supreme Court in CIT vs. SSA's Emeral Meadows (2016) 73 Taxmann.com 248 (SC) wherein the decision of Karnataka High Court rendered in COMMISSIONER OF INCOME TAX -VSMANJUNATHA COTTON AND GINNING FACTORY (2013) 3591TR 565 was upheld. 5. That even on merits the penalty u/s 271 (1)(c ) deserves to be quashed as it is not sustainable either in law or on facts. The alleged interest income was already offered in the subsequent year 2014-15 much before the assessment proceedings. The assessee had shown interest income of AY 2014-15 at Rs. 17,74,550 as against Rs. 587773 shown in 26AS. Thus much higher income was shown in subsequent year. The difference in offering income arose because of late intimation by bank in AY 2013-14 and thus the income was offered in the subsequent year. There is no concealment of income or furnishing inaccurate particulars. The difference arose because of late reporting by bank. 6. That without prejudic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and Ginning Factory (2013) 359 ITR 565. He further submitted that even on merit, the penalty u/s 271(1)(c) of the Act deserves to be quashed as it is not sustainable either in law or in facts. It is further submitted that the alleged income was already offered in subsequent year i.e. in the assessment year 2014-15 much before the initiation of assessment proceedings. The assessee has declared interest income at Rs. 17,74,500/- reflected in form No.26AS. Thus, much higher interest income was disclosed in the subsequent year. The difference in income arosed due to delayed intimation by the bank. Hence, the income was offered in subsequent year. Thus, there is no concealment of income or furnishing inaccurate particulars of income. 7. Per contra Ld. Departmental Representative (DR) vehemently opposed the submissions and relied on the judgment of Hon'ble Supreme Court rendered in the case of M/s Sundaram Finance Ltd. vs. Dy. Commissioner of Income Tax. It is contended that in pursuance of notice u/s 271(1)(c) of the Act, the assessee filed reply and no objection was raised regarding notice being defective before the A.O. or before Ld. CIT(A). He contended that at such a belated s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In the cases referred to in clause (c) [or clause (d)], [in addition to which shall not exceed [three times], the amount of tax sought to be evaded by reason of the concealment of particulars of his income [or fringe benefits] or the furnishing of inaccurate particulars of suchj income [or fringe benefits]." Section 274 of the Act. (1) No order imposing a penalty under this Chapter shall be made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (2) No order imposing a penalty under this Chapter shall be made- (i) by the Income-tax officer, where the penalty exceeds ten thousand rupees; (ii) by the Assistant Commissioner [or Deputy Commissioner], where the penalty exceeds twenty thousand rupees, except with the prior approval of the [Joint] Commissioner. (3) An income-tax authority on making an order under this Chapter imposing a penalty, unless he is himself the Assessing Officer, shall forthwith send a copy of such order to the Assessing Officer.] 10. Now coming to the objection of the assessee that notice is defective, the impugned notice is reproduced as under: 11. From the above, it is evident that notice so issued does ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the assessee is liable to be rejected on facts. That apart, this issue can never be a question of law in the assessee's case, as it is purely a question of fact. Apart from that, the assessee had at no earlier point of time raised the plea that on account of a defect in the notice, they were put to prejudice. All violations will not result in nullifying the orders passed by statutory authorities. If the case of the assessee is that they have been put to prejudice and principles of natural justice were violated on account of not being able to submit an effective reply, it would be a different matter. This was never the plea of the assessee either before the Assessing Officer or before the first Appellate Authority or before the Tribunal or before this Court when the Tax Case Appeals were filed and it was only after 10 years, when the appeals were listed for final hearing, this issue is sought to be raised. Thus on facts, we could safely conclude that even assuming that there was defect in the notice, it had caused no prejudice to the assessee and the assessee clearly understood what was the purport and import of notice issued under section 274 r/w section 271 of the Act. The ..... X X X X Extracts X X X X X X X X Extracts X X X X
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