Case Law Details
Relevant Extract of the Judgment
3. The relevant facts are that a search & seizure operation was conducted at the premises of the assessee and its group company on 18.02.2011. In response to the notice issued under sec. 153A, the assessee furnished return of income along with year-wise bifurcation of Rs.10 crores surrendered by the assessee immediately after the completion of search. The Assessing Officer framed assessments under 153A accepting the returns of income filed for the assessment years under consideration. The Assessing Officer thereafter initiated penalty proceedings under sec. 271(1)(c) of the Income-tax Act, 1961 and levied the penalty for the assessment years under consideration. The aggrieved assessee approached the first appellate authority but could not succeed. The action of the learned CIT(Appeals) in upholding the penalty levied by the Assessing Officer for these assessment years has been questioned by the assessee before the ITAT.
Penalty under Section 271(1)(c) of Income TAx Act, 1961 cannot be imposed if Assessing Officer does not specify whether the penalty is for “concealment of income” or for “furnishing inaccurate particulars
7. We have considered the rival arguments made by both the sides, perused the orders of the Assessing Officer and the CIT(A) and the Paper Book filed on behalf of the assessee. We have also considered the various decisions cited before us. The learned counsel for the assessee drew out attention to the show cause notice issued u/s. 274 of the Act before imposing penalty and submitted that the said notice doe s not specify as to whether the assessee is guilty of having “furnished inaccurate particulars of income” or of having “concealed particulars of such income”. He pointed out that show cause notice does not strike out the irrelevant portion viz., “furnished inaccurate particulars of income” or “concealed particulars of such income”. He further drew attention to the assessment order also stating that there is no charge specified in the assessment order itself. He drew our attention to a decision of the Hon’ble’ Karnataka High Court in the case of CIT v. Manjunatha Cotton & Ginning Factory (2013) 218 Taxman 423 (Kar.) wherein it was held that if the show cause notice u/s. 274 of the Act does not specify as to the exact charge viz., whether the charge is that the assessee has “furnished inaccurate particulars of income” or “concealed particulars of income” by striking out the irrelevant portion of pointed show cause notice, then the imposition of penalty on the basis of such invalid show cause notice cannot be sustained. To examine this argument of the ld. AR we firstly examine facts for assessment year 2006- 2007, The assessment under section 153A (1) (b) of the income tax act was framed on 28/03/2013 wherein returned income under section 153A is accepted as assessed income. While initiating the penalty proceedings under section 271 (1) (C), Ld. assessing officer in assessment order has stated that the assessee has not disclosed this income is Suo Moto but for the search this income would not have been unearthed. Hence he was satisfied that the penalty under section 271 (1) (C) read with expression 5A of the income tax act has to be initiated for which notice under section 271 (1) (C) is being issued separately. Then he went on to say that :-
“ However as discussed above, I am satisfied that the assessee is liable for facing penalty proceedings under section 271 (1) ( c) of the income tax act 1961 read with explanation 5A thereto, with regards to the addition of Rs. 2535000/- as detailed above and accordingly penalty proceedings are being initiated separately for the issue of notice under section 274 of the act.”
Please become a Premium member. If you are already a Premium member, login here to access the full content.
