TMI Blog2020 (8) TMI 271X X X X Extracts X X X X X X X X Extracts X X X X ..... d:- 3-8-2020 - Shri P.M.Jagtap, Vice-President and Shri S.S.Godara, Judicial Member By Appellant : Shri Shuvo Chakraborty, Advocate By Respondent : Shri Dhrubajyoti Roy, JCIT-DR ORDER Per S. S. Godara, Judicial Member:- This assessee s appeal for assessment year 2014-15 arises against the Commissioner of Income Tax (Appeals)-Burdwan s dated 03.12.2019, passed in case No.19/ CIT(A)/Bwn/ITO,WD-1(1)/2017-18 upholding Assessing Officer s action imposing penalty of ₹3,21,026/- involving proceedings u/s 271(1)(c) of the Income Tax Act, 1961; in short the Act . Heard Shri Shuvo Chakraborty representing assessee and Shri Dhrubajyoti Ray, senior departmental representative appearing at the Revenue s behest. Case file perused. 2. The assessee s identical sole substantive grievance raised in the instant appeal challenges correctness of both the lower authorities action imposing the penalty in issue of ₹3,21,026/- u/s 271(1)(c) of the Act. It emerges from the penalty notice dated 15.12.2016 that the Assessing Officer did not specify as to whether the assessee is accused of concealment of particulars of any taxable income or he had furnished inaccu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in Section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed farm where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As the said provisions have to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, 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. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssed. m) If the explanation offered, even though not substantiated by the assessee, but is found to be bona fide and all facts relating to the same and material to the computation of his total income have been disclosed by him, no penalty could be imposed. n) The direction referred to in Explanation IB to Section 271 of the Act should be clear and without any ambiguity. o) If the Assessing Officer has not recorded any satisfaction or has not issued any direction to initiate penalty proceedings, in appeal, if the appellate authority records satisfaction, then the penalty proceedings have to be initiated by the appellate authority and not the Assessing Authority. p) Notice under Section 274 of the Act should specifically state the grounds mentioned 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, n ..... X X X X Extracts X X X X X X X X Extracts X X X X
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