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1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU
ON THE 19TH DAY OF DECEMBER, 2018
BEFORE
THE HON'BLE MR. JUSTICE RAVI MALIMATH
AND
THE HON’BLE MR.JUSTICE K.NATARAJAN
INCOME TAX APPEAL NO.143 OF 2011
BETWEEN:
THE COMMISSIONER OF INCOME-TAX C. R. BUILDING, QUEENS ROAD BENGALURU.
THE ASSISTANT COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE-1(2) C. R. BUILDING, QUEENS ROAD BENGALURU. ... APPELLANTS
(BY SRI: K.V.ARAVIND, ADVOCATE)
AND:
M/S. GAURI GANESH REAL ESTATE NO.628 OF 2, II FLOOR, I MAIN 11TH CROSS, I STAGE, INDIRANAGAR BENGALURU. ... RESPONDENT
(BY SRI: A.SHANKAR, SENIOR COUNSEL ALONGWITH SRI M.LAVA, ADVOCATE)
2 THIS INCOME TAX APPEAL IS FILED UNDER SECTION 260-A OF THE INCOME-TAX ACT 1961, ARISING OUT OF ORDER DATED 06.12.2010 PASSED IN INCOME TAX APPEAL NO.821/BANG/2009, FOR THE ASSESSMENT YEAR 2005-2006, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN; ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE INCOME TAX APPELLATE TRIBUNAL, BENGALURU IN INCOME TAX APPEAL NO.821/BANG/2009 DATED 06.12.2010 CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-1(2), BENGALURU, IN THE INTEREST OF JUSTICE AND EQUITY
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THIS INCOME TAX APPEAL COMING ON FOR FINAL HEARING THIS DAY, RAVI MALIMATH J., DELIVERED THE FOLLOWING:
JUDGMENT
This appeal was admitted on 30.01.2012 to consider the following substantial question of law: “Whether the appellate Tribunal was right in taking the view that every concealment or furnishing of inadequate particulars of income will not necessarily attract penalty and therefore set aside levy of penalty in respect of the assessee for the assessment year 2005-06, even without
3 recording a finding as to what are the exonerating circumstance and without reference to the statutory provisions viz., one or other of the explanations 1 to 7 of Section 271(1)(c) of the Income Tax Act, 1961?”
The learned Counsel submits that the questions of law requires to be re-framed. They have addressed the arguments on the same. Hence, the question of law is re-framed and the following substantial question of law is framed for consideration in this appeal. “Whether the levy of penalty under Section 271(1)(c) of the Act is sustainable in law when the notice issued under Section 274 of the Act by the Assessing Officer does not indicate the specific ground for initiation of penalty proceedings and is thus not in accordance with the provisions of law on the fact and circumstances of the case?”
The learned Counsel contends that the substantial question of law is covered by the judgment of this Court in the case of THE COMMISSIONER OF INCOME
4 TAX AND ANOTHER Vs. MANJUNATHA COTTON AND GINNING FACTORY [(2013) 359 ITR 565].
Following the aforesaid judgment of this Court, the substantial question of law is answered in favour of the assessee and against the revenue. The appeal is accordingly, dismissed. Penalty order for the assessment years 2004-05 and 2005-06, are set aside.
Sd/-
Sd/- JUDGE
JUDGE
*bgn/-