ALLIANCE FINSTOCK LTD,MUMBAI vs. ASST CIT CEN CIR 29, MUMBAI

Aforesaid matter is a partially recalled matter since the appeal was disposed-off by the Tribunal vide order dated 19/09/2018. However, upon assessee’s miscellaneous application MA No. 628/Mum/2018 order dated

We find that in the aforesaid appeal, the assessee had assailed the imposition of penalty u/s 271(1)(c) on legal grounds as well as on merits. The legal grounds were contained in Ground Nos. 2 & 3 whereas grounds on merits, were contained in Ground Nos. 1 & 4. Upon perusal of earlier order dated 19/09/2018 passed by Tribunal, it is evident that the bench has, dismissed the appeal by confirming the said penalty. However, the assessee, in miscellaneous application, drew attention to the fact that show-cause notice issued u/s 274 r.w.s. 271(1)(c) dated 28/01/2013 was not actually a show-cause notice but a simple notice / letter and this fact got overlooked while adjudicating the issue on legal grounds. Concurring with the said submissions, the bench recalled legal grounds raised in Ground Nos. 2 & 3 and accordingly, these grounds have come for fresh adjudication before this bench.

We have heard and considered the rival submissions, perused material fact and deliberated on various judicial pronouncements cited before us. Our adjudication on these grounds is given in the succeeding paragraphs.

Ground Nos.2 and 3 read as under: -

0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the levy of Penalty u/s 271(1)(c) on ignoring the fact that Ld AO, in assessment order, had not specified whether penalty is initiated for concealment of income or furnishing inaccurate particulars of income;

0 On facts and circumstances of the case and in law, the Penalty order u/s 271(1)(c) is bad in law since the notice u/s 274 does not specify whether penalty is initiated for concealment of income or furnishing inaccurate particulars of income.”

1 Facts as emanating from earlier orders of the Tribunal are that the assessee was assessed for the year under consideration u/s. 143(3) r.w.s. 153A on 30/12/2010 wherein it was saddled with quantum addition of Rs.16.79 Lacs on account of unexplained cash credit u/s 68. The quantum addition has already been confirmed by the Tribunal.

2 As against quantum addition, penalty proceedings were initiated by Ld. AO in the quantum assessment order by observing as under: -

3 In the course of penalty proceedings, a show-cause notice u/s 274 r.w.s 271(1)(c) was issued on same date i.e. 30/12/2010 wherein the assessee was directed to attend to penalty proceedings on 11/01/2011 at specified time. A copy of show-cause notice has already been placed before us which we have considered. However, the assessee failed to attend the proceedings and no reply was filed against the same. Thereafter, the assessee, vide letter dated 28/01/2013, was again reminded to put forward his stand in response to proposed levy of penalty. In response thereto, although the assessee contested the imposition of penalty, however, not satisfied with assessee’s submissions, Ld. AO, at para 3.4 of the penalty order, levied penalty in terms of Explanation-1 to Section 271(1)(C) of Income Tax Act, 1961. It is noted that no legal plea as to 4 Alliance Finstock Limited Assessment Year-2006-07 framing of specific charge was ever taken / raised by the assessee before Ld. AO during penalty proceedings.

4 Similar was the position before first appellate authority, wherein the assessee again did not raise the issue of framing of specific charge and contested the penalty on merits only. The Ld. CIT(A), confirmed the penalty, finding the same to be squarely covered by Explanation 5A to Section 271(1)(c). Aggrieved the assessee challenged the penalty before this Tribunal wherein the penalty on merits, as noted by us in preceding paragraphs, has already been confirmed by the Tribunal. Vide Ground Nos. 2 & 3, with which we are concerned, the assessee has taken a legal plea that specific charge i.e. concealment of income or furnishing of inaccurate particulars of income, was not framed against the assessee in quantum assessment order while initiating penalty. The second plea is that the show- cause notice u/s 274 r.w.s. 271(1)(c) was bad in law since the same did not specify the appropriate limb for which the penalty proceedings were being initiated against the assessee. For the said submissions, reliance has been placed on catena of judicial pronouncement as kept before us.

Upon due consideration of facts as enumerated by us in the preceding paragraphs, we find that penalty proceedings were initiated by Ld. AO in the quantum assessment order, keeping in view the quantum additions. In our considered opinion, the requirements of law were fulfilled at this stage and nothing more was required to be mentioned in the quantum assessment order since Ld. AO, with due application of mind, reached a conclusion that penalty ought to have been levied against the assessee keeping in view the 5 Alliance Finstock Limited Assessment Year-2006-07 quantum additions. Therefore, we do are not find any merit in Ground No.3 raised before us.

6 So far as the validity of show-cause notice u/s 274 r.w.s. 271(1)(c) dated 30/12/2010 is concerned, we find that the said notice was completely disregarded by the assessee and the same was never responded to. No reply was furnished against the same and the plea of framing of specific charge in the said notice, was never raised by the assessee during entire penalty proceedings. The assessee merely want to take shelter of the notice which was conveniently ignored by the assessee. This is further fortified by the fact that this plea was never taken at any time even during appellate proceedings also. Therefore, the case laws being relied upon by the assessee, in our considered opinion, would not come to the rescue of the assessee, keeping in view the assessee’s conduct and the factual matrix. Therefore, ground No. 4 also stand dismissed.

Resultantly, both the ground stand dismissed. The appeal remains dismissed. Order pronounced in the open court on 03rd October, 2019. (Saktijit Dey) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member