TMI Blog2021 (12) TMI 982X X X X Extracts X X X X X X X X Extracts X X X X ..... furnishing inaccurate particulars of such income. Neither the assessment order, nor the notice issued under section 271(1)(c) read with section 274 of the Act specify the ground on which the penalty was proposed. It simply states that either for concealment of income or for furnishing of inaccurate particulars, such proceedings are initiated. It is therefore, clear that neither the assessment order nor the notice issued under section 274 of the Act give any reasonable grounds for the assessee to defend themselves. Hon ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] and SSA s Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] wherein it was held that the notice issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n exchange loss. Learned Assessing Officer simultaneously initiated proceedings under section 271(1)(c) of the Act against the assessee for concealment of income/furnishing of inaccurate particulars thereof. Notice under section 271(1)(c read with section 274 of the Act was issued on 23/12/2011. By order dated 24/3/2015 learned Assessing Officer levied a penalty of ₹ 3,39,27,424/-for furnishing of inaccurate particulars of income. 3. Assessee preferred appeal before the Ld. CIT(A) and by order dated 29/3/2017 Ld. CIT(A) upheld the penalty and dismissed the appeal. Hence, the assessee filed this appeal both on technical issues and also on merits. Though the assessee sought to challenge the penalty proceedings on the ground of limita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be sustained. 5. Per contra, placing on the decision of the Hon ble Madras High Court in the case of Sundaram Finance Ltd vs. CIT (2018) 403 ITR 407 (Madras), Ld. DR submitted that the assessee understood the purport of the notice and without raising any objection whatsoever they have participated in the penalty proceedings as well as the proceedings before the Ld. CIT(A) and, therefore, no prejudice was caused to the case of the assessee. He therefore, prayed to dismiss the appeal. He further submitted that the conduct of the assessee in making untenable claims amounts to furnishing of inaccurate particulars of income and thereby concealment of income. 6. We have gone through the record in the light of the submissions made on e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n favour of the assessee observing that: The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short the Act ) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner Of Income Tax -Vs- Manjunatha Cotton And Ginning Factory (2013) 359 ITR 565. In our view, since the matter is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgement in the subsequent order in Commissioner of Income Tax v. SSA s Emerald Meadows (2016) 73 taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this court is unable to find any error having been committed by the ITAT. 10. It is, therefore, clear that for the AO to assume jurisdiction u/s 271(1)(c), proper notice is necessary and the defect in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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