MR.S.MUKUNDA ,SHIMOGA vs. THE DEPUTY COMMISSIONER OF INCOME TAX CIRCLE-1 , SHIMOGA

O R D E R

PER SHRI PAVAN KUMAR GADALE, JM :

3. The brief facts of the case are that the assessee has filed Return of Income and the assessment was completed under Section 143(3) r.w.s. 144 & 147 of the Act with addition of Rs.3,13,552 on 30.12.2010. On appeal, the learned CIT(Appeals) has confirmed the addition and further the ITAT upheld the order of the learned CIT(Appeals). The Assessing Officer subsequently issued Notice under Section 274 of the Act for levy of penalty under Section 271(1)(c) of the Act and the assessee has filed a letter dt.5.1.2018 explaining the reasons in the penalty proceedings whereas the Assessing Officer found that the assessment order in the Tribunal, therefore the Assessing Officer has levied a penalty of Rs.98,432 and passed order under Section 271(1)(c) of the Act Dt.31.01.2018. Aggrieved by the penalty order, the assessee has appealed with the CIT (Appeals) and the assessee has challenged the issue of notice dt.31.12.2010 mentioning that the Assessing Officer has not specified whether the penalty is levied for concealment of income or furnishing of inaccurate particulars of income but CIT (Appeals) has dismissed the assessee's appeal. Aggrieved by the order of CIT(Appeals), the assessee has filed appeal with Tribunal.

4. At the time of hearing, the learned Authorised Representative has argued only on the validity of notice issued for levy of penalty and referred to the paper book filed at page 1 where the copy of notice has been enclosed for cancellation of penalty. Contra, the learned Departmental Representative relied on the orders of CIT(Appeals). 5. We heard the rival submissions and perused the material on record and the orders of the lower authorities. The only prima facie issue argued by the learned Authorised Representative that the Assessing Officer has passed the order u/s 271(1)(c) of the Act on the basis of invalid notice. We found, the Hon’ble Apex Court dismissed the Special Leave Petition filed by the Revenue against the judgment of the Hon’ble Karnataka High Court in of 2015 dated 23/11/2015 in the case of CIT vs. M/s.SSA’s Emerald Meadows where an identical issue was decided in favour of the assessee. We consider it appropriate to refer to the operative part of the decision of the Hon’ble High Court of Karnataka in the case of M/s. SSA’s Emerald Meadows (supra) which is as under:

“2. This appeal has been filed raising the following substantial questions of law:

(1)Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2)Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is bad in law and invalid despite the amendment of Section 27.41 13) with retrospective effect and bra virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same?

(3)Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income?

4 In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed.”

of the assessee.