HC held that we do not think that there is any justification for the Deputy Commissioner of Income Tax, Central Circle 8(1) to threaten the appellant/applicant with any prosecution. Even if such prosecution under section 276C is launched, the same shall not proceed till the pendency of this Appeal.
FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT
1. Heard both sides. Perused the Application/Notice of Motion requesting an out of turn hearing for admission of this Appeal.
2. For the reasons set out in the affidavit-insupport, we grant the request of the appellantassessee and take up the Appeal for admission forthwith.
3. Prima facie, the show cause notices, copies of which are at pages 174 and 176 of the paper book, did not indicate what is the lapse or act attributable to the assessee, for which the Revenue proposes a penalty.
4. Prima facie, the ingredients of Section 271 of the Income Tax Act, 1961 (for short, ‘IT Act’), which alone are relevant for this case, are clear. Section 271 (1) Clauses (c) and (d) are very clear and it would have to be indicated as to what is the act attributale, whether it is concealment of the particulars of income or furnishing of inaccurate particulars of income or concealing the particulars of the fringe benefits or furnishing inaccurate particulars of such fringe benefits or failure to comply with the notices as are spelt out by Clause (b) of Sub-section (1) of Section 271 of the IT Act. The satisfaction has to be clearly spelt out and which we do not think is spelt out from the present show cause notices
5. Hence the Appeal raises the following questions of law. It is admitted on the following substantial questions of law:
i) Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in approving penalty of Rs.26,87,196/ under Section 271(1)(c) of the Act?
ii) Whether on the facts and in the circumstances of the case and in law, was justified in not appreciating that the Assessing Officer ought to have made his mind whether initiation of penalty is on account of furnishing of inaccurate particulars or concealment of income in accordance with the ratio laid down in the decision of this Honourable Court in CIT v. Samson Perinchery 392 ITR 4?
6. Heard both sides on the point of stay.
7. Once we have admitted the Appeal on substantial questions of law, we do not think that there is any justification for the Deputy Commissioner of Income Tax, Central Circle 8(1) to threaten the appellant/applicant with any prosecution. Even if such prosecution is launched, the same shall not proceed till the pendency of this Appeal. The Notice of Motion is made absolute in terms of prayer clause (a).