SRI B J HONNASHETTY (HUF) ,BIDADI vs. THE INCOME TAX OFFICER WARD-3 , MANDHYA

O R D E R

Per Shri A.K. Garodia, Accountant Member

by the assessee are as under. “1. The Ld. CIT (A) erred in passing the order in the manner which he did.

2. The learned CIT(A) ought to have appreciated that there being no concealment or furnishing of inaccurate particulars of income, the levy of penalty under Section 271(1)(c) was unwarranted.

3. The learned CIT(A)erred in confirming the penalty which was not indicating as to the proceedings had been initiated either for concealment of income or furnishing of inaccurate particulars in the show cause notice, the penalty proceedings confirmed were bad in law and consequently the penalty levied is also bad in law and liable to be deleted as held by the jurisdictional High Court, and accordingly the penalty is liable to be cancelled.

4. The learned CIT(A) ought to have appreciated that the Appellant had disclosed all the materials and given explanation towards justification of the claim and accordingly there was no reason to hold that the Appellant had concealed income or furnished inaccurate particulars to justify the levy of penalty under Section 271(1)(c) of the Act.

5. The CIT(A) ought to have appreciated that the having issued the notice under section 274 read with section 271(1)(c) of the Act in a mechanical manner, the penalty order passed under section 271(1)(c) of the Act is not sustainable in the eye of law.

6. The Appellant begs to submit that the decision of the jurisdictional High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Karn) is squarely applicable and therefore the impugned order of the authorities below is required to be set aside. 7. Without prejudice, the impugned penalty as confirmed are arbitrary, excessive and ought to be reduced substantially. 8. For these and such other grounds that may be urged at the time of hearing, the Appellant prays that the appeal may be allowed.” 3. It was submitted by ld. AR of assessee that on page no. 59 of the paper book is the notice issued by the AO u/s. 274 r.w.s. 271 of the IT Act, 1961 on 28.03.2013. She pointed out that in the said notice, it is stated by the AO that the assessee have concealed the particulars of income or have furnished inaccurate details of such income. She pointed out that hence, the allegation of the AO is not clear as to whether the allegation is regarding concealment of income or furnishing of inaccurate particulars of income. She submitted that under these facts, the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Manjunatha Cotton and Ginning Factory as reported in (2013) 359 ITR 565 is squarely applicable and as per this judgment, in the facts of the present case, the penalty imposed by the AO is not sustainable. The ld. DR of revenue supported the orders of authorities below. 4. We have considered the rival submissions. First of all we reproduce the contents of the notice issued by the AO u/s. 274 r.w.s. 271 of the IT Act, 1961 from page no. 59 of the paper book. The content of the notice is reproduced hereinbelow. “Whereas in the course of Proceedings before me for the Assessment Year 2010-11, it appears to me that you:- "have concealed the particulars of your income or have furnished inaccurate details of such income." You are hereby requested to appear before me at 11.30 a.m. on Page 3 of 3 15/04/2013 and show cause why an order imposing a penalty on you should not be made under Sec.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 authorized representative, you may show cause in writing on or before the said date which will be considered before any such order is made under Sec.271.”