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Income Tax Appellate Tribunal, INDORE BENCH, INDORE
Before: HONBLE KUL BHARAT & HONBLE MANISH BORAD
arising out of the order u/s 271(1)(c) of the Income Tax Act 1961(In short the ‘Act’) dated 30.06.2009 framed by ACIT-3(1), Indore.
Panjwani Packagings Pvt. Ltd to 753/Ind/2013 2. As the issues raised in these appeals are common and relates to same assessee, they were heard together and are being disposed off by the common order for sake of convenience and brevity.
Briefly stated facts as culled out from the records are that the assessee is a company engaged in the manufacturing activity of packaging goods at Ghata Billod, Dist. Dhar (M.P) and was set up with the promoters contribution and finance from M.P.F.C., bank and subsidy. Search u/s 132 of the I.T. Act was carried out at the business/residential premises of the assessee and its group concerns on 10.8.1992 to 13.08.1992. Notices u/s 148 of the Act were duly served on the assessee and the income was assessed and also penalty u/s 271(1(c) levied as follows; S.No Assessment Year Assessed Income Penalty u/s 271(1)(c)
1 1987-88 Rs.20,67,290/- Rs.5,56,050/- 2 1988-89 Rs.58,27,470/- Rs.20,24,236/- 3 1989-90 Rs.88,25,810/- Rs.14,45,871/- 4 1990-91 Rs.57,95,390/- Rs.8,02,948/- Panjwani Packagings Pvt. Ltd to 753/Ind/2013 5 1991-1992 Rs.2.27,00,000/- Rs.2,78,415/- 6 1992-1993 Rs.1,09,15,723/- Rs. 3,66,275/- Against the levy of above penalty assessee filed appeals before Ld. CIT(A) but could not succeed.
The assessee is now in appeal raising following grounds of appeal for Assessment Year 1987-88;
Assessment Year 1987-88
'l.The learned CIT(A)-I Indore has erred in confirming the penalty levied u/s.271 (1 )(c) without appreciating that the appellant has neither concealed the income nor furnished inaccurate particulars of income. On the facts and circumstances of the case no penalty is leviable u/s, 271 (1) (c) of the Act.
2,The learned CIT(A)-I Indore has erred in upholding the penalty of Rs.5,56,050/- u/s 271 (1)(c) by relying on some judicial pronouncement, which are distinguishable. On the facts and in the circumstances of the case, the Learned CIT(A)-I Indore ought not to have upheld the penalty of Rs.5,56,050/- u/s,271 (1) (c) of the Act.
Panjwani Packagings Pvt. Ltd to 753/Ind/2013 3,The learned CIT(A)-I Indore has erred in confirming the penalty of Rs.5,56,050/levied u/s. 271 (1 )(c) of the Income Tax Act, 1961.
ADDITIONAL GROUNDS OF APPEAL
1.The petitioner submits that the learned Commissioner of Income Tax (Appeals)-I, Indore, has erred in upholding the penalty levied u/s 271(1)(c) without determining the amount of tax sought to be evaded, as required under the said provision, sought to pending effect to the Appellate Orders passed by the Hon'ble Bench and the learned Commissioner of Income Tax (Appeals)-I, Indore. Thus, on the facts and circumstances, the petitioner submits that unless tax sought to evaded is finally determined, the penalty order so passed is premature and void and it is therefore, prayed that the order imposing penalty u/s 271 (1 )(c) may kindly be set-aside.
ADDITIONAL GROUNDS OF APPEAL
1. Because the penalty imposed u/s 271 (I)(c) of the Income Tax c and confirmed by Ld. CIT(A) is also wrong and bad in law as while initiating the penalty in the assessment Order there is no specific satisfaction of the Assessing Officer that for which default the penalty has been initiated either for concealment of income or for furnishing inaccurate particulars of income.
2. Because there is no specific satisfaction of the Assessing Officer while initiating the penalty is itself clear from the notices issued u/s 271 (I)(c). 5. We find that similar grounds including additional grounds have been raised for Assessment Year 1988-89 to Assessment Year Panjwani Packagings Pvt. Ltd to 753/Ind/2013 1992-93 with the change of amount of penalty levied u/s 271(1)(c) of the Act.
6. At the outset Ld. Counsel for the assesse taking up the legal ground about the validity of the notice issued u/s 274 r.w.s.
271(1)(c) of the Act pointed out mistake in the penalty notice and submitted that the issue is squarely covered in favour of the assessee by the judgment of Hon'ble jurisdictional High Court in the case of Principal Commissioner of Income Tax v/s Kulwant Singh Bhatia dated 09.05.2018 (ITA 9 to 14 of 2018) wherein it was held that the penalty u/s 271(1)(c) of the Act is not sustainable in law as the notice was not specific. Hon'ble court observed as follows:-
“on due consideration of the arguments of the Learned counsel for the appellant, so also considering the fact that the ground mentioned in show cause notice would not satisfy the requirement of law, as notice was not specific, we are of the view that Learned Tribunal has rightly relying on the decision of CIT V/s Manjunatha Cotton Ginning Factory and CIT V/s SSA'S Emerald Meadows rightly allowed the appeal of the assessee and set aside the order of penalty imposed by the authorities. No substantial question of law is arising in these appeals. ITA. No(s) 9/2018, 10/2018, 11/2018, 12/2018, 13/2018 and 14/2018, filed by the appellant have no merit and are hereby dismissed."
Panjwani Packagings Pvt. Ltd to 753/Ind/2013 7. Ld. Departmental Representative vehemently argued and supported the orders of lower authorities.
We have heard rival contentions and perused the records placed before us and carefully gone through various judgments referred and relied by the Ld. Counsel for the assessee. Assessee has taken up the legal issue in this appeal challenging the legality of the penalty proceedings initiated by issuance of notice u/s 274 r.w.s 271(1)(c) of the Act by contending that in the penalty notice no specific charge has been leveled against the assessee and the Ld.A.O has merely mentioned both the limbs i.e. concealed the particulars of income or furnished inaccurate particulars of income.
It has been agreed by both the parties that similar type of notices except the change of assessment years have been issued u/s 274 of the Act for the years under appeal. To adjudicate this issue we will have to go through the impugned notice u/s 274 r.w.s. 271(1)(c) of the Act for Assessment Year 1987-88 which has been placed in the paper book at page-11 and the same is reproduced below:-
Panjwani Packagings Pvt. Ltd to 753/Ind/2013 NOTICE UNDER SECTION 274 READWITH SECTION 271(1)(c) OF THE INCOME TAX ACT, 1961 To, M/s. Panjwani Packaging Pvt. Ltd, 61, Keshar Bagh Road, Indore (M.P.) Sir/Madam, Whereas in the course of proceedings before me for the A.Y. 1987-88 it appears to me that you :- have concealed the particulars of your income or furnished inaccurate particulars of such income.
You are hereby requested to appear before me at 10.30 A.M on 30/11/2010 and show cause why an order imposing penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing or before the said date which will be considered before any such order is made under section 271.