TMI Blog2020 (2) TMI 76X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 620 - KARNATAKA HIGH COURT ] is squarely applicable in the present case because learned DR of the revenue could not point out any difference in facts. We find that in each of the notices issued by the AO under section 274, the AO is alleging that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income. Hence it is seen that the allegation is vague. Notice u/s 274 should specifically state the grounds mentioned in section 271 (1) (c ) i.e. whether it is for concealment of income or for furnishing of inaccurate particulars of income and clause q) specifically states that Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. Clause r) specifically states that the assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee Penalty imposed by the AO u/s 271 AAB - existence of undisclosed income - Neither in the assessment order nor in the penalty order, this fact is pointed out by the AO that any statement was recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2009 10, ₹ 30,000/- in A. Y. 2010 11, ₹ 150,000/- in A. Y. 2011 12, ₹ 150,000/- in A. Y. 2012 13, ₹ 72,225/- in A. Y. 2013 14 and 82,550/- in A. Y. 2014 15. 3. It was submitted by the learned AR of the assessee that the assessee is a Civil Contractor following Project Completion Method and because of search and at the instance of the search party, the assessee accepted to recognise the revenue on partial completion and accordingly, the turnover was recognised and return was filed. As per Project Completion method, there was no turnover in any of these years as was being followed by the assessee. It was also submitted that there is no books and accounts prescribed under Rule 6F (1) for Civil Contractor and because of these facts, in these years, the assessee was not required as per law to maintain any books of accounts and in the absence of books of accounts, there cannot be tax audit requirement u/s 44AB. He placed reliance on the tribunal order rendered in the case of K. V. Ramachandran vs. DCIT in ITA No. 104/Coch/2013 dated 26.07.2013 and submitted a copy of this tribunal order. He pointed out that in that case also, the assessee was a ci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... squarely applicable in the present case because learned DR of the revenue could not point out any difference in facts. We find that in each of the notices issued by the AO under section 274, the AO is alleging that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income. Hence it is seen that the allegation is vague. Para 63 of this judgment is relevant because it contains the conclusion and hence, we reproduce it as under:- CONCLUSION 63. In the light of what is stated above, what emerges is as under: a) Penalty under Section 271(1)(c) is a civil liability. b) Mens rea is not an essential element for imposing penalty for breach of civil obligations or liabilities. c) Willful concealment is not an essential ingredient for attracting civil liability. d) Existence of conditions stipulated in Section 271(1)(c) is a sine qua non for initiation of penalty proceedings under Section 271. e) The existence of such conditions should be discernible from the Assessment Order or order of the Appellare Authority or Revisional Authority. f) Ever if there is no specific fi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis 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 penalty is levied, cannot be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... isclosed income therein; (b) a sum computed at the rate of twenty per cent. of the undisclosed income of the specified previous year, if such assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, does not admit the undisclosed income; and (ii) on or before the specified date (A) declares such income in the return of income furnished for the specified previous year; and (B) pays the tax, together with interest, if any, in respect of the undisclosed income; (c) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered by the provisions of clauses (a) and (b). (1A) The Assessing Officer may, notwithstanding anything contained in any other provisions of this Act, direct that, in a case where search has been initiated under section 132 on or after the date on which the Taxation Laws (Second Amendment) Bill, 2016 receives the assent of the President, the assessee shall pay by way of penalty, in addition to tax, if any, payable by him,- (a) a sum computed at the rate of thirty per cent. of the undisclosed income of the specif ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [Principal Chief Commissioner, Chief Commissioner or Principal Commissioner or Commissioner] before the date of search; or (ii) any income of the specified previous year represented, either wholly or partly, by any entry in respect of an expense recorded in the books of account or other documents maintained in the normal course relating to the specified previous year which is found to be false and would not have been found to be so had the search not been conducted. 9. As per Para 9.2 of the Penalty order, it is stated by the AO that the case of the assessee falls under clause (a) of sub section (1) of section 271AAB of I T Act. As per the provisions of this clause as reproduced above, this is the pre-condition that such assessee in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived. Neither in the assessment order nor in the penalty order, this fact is pointed out by the AO that any statement was recorded u/s 132 (4) and some undisclosed income is admitted by the assessee in the same and the assessee has specified the manner in which such income ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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