THE COMMISSIONER OF INCOME-TAX vs. SMT LATHA RAMACHANDRA INAMDAR

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ITA/220/2015HC KarnatakaKAHC01031093201507 September 2015Bench: B.MANOHAR,VINEET SARAN4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that a penalty under Section 271(1)(c) requires the notice to clearly specify whether the penalty is for concealment of income or furnishing inaccurate particulars. Failure to do so renders the penalty unsustainable.

What were the facts?

The Revenue appealed against an ITAT order that held a penalty under Section 271(1)(c) was invalid. The ITAT found that the notice for penalty did not specify whether it was for concealment of income or furnishing inaccurate particulars.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid if the notice does not specify whether it is for concealment of income or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

IN THE HIGH COURT OF KARNATAKA AT BENGALURU

DATED THIS THE 7TH DAY OF SEPTEMBER , 2015

PRESENT THE HON’BLE MR. JUSTICE VINEET SARAN

AND

THE HON’BLE MR. JUSTICE B MANOHAR

ITA No.220/2015

BETWEEN:

1.

THE COMMISSIONER OF INCOME-TAX

C R BUILDING, QUEENS ROAD

BANGALORE

2.

THE DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE -5(1) UNITY BUILDING, ANNEXE MISSION ROAD BANGALORE – 560 027.

.. APPELLANTS

(BY SRI K V ARAVIND A/W SRI G KAMALADHAR, ADVs.)

AND:

SMT.LATHA RAMACHANDRA INAMDAR PROP: TRUPTI NURSING HOME No.463, I BLOCK, III STAGE BASAVESWARANAGAR BANGALORE-560 079 PAN:AACPI 2319C.

.. RESPONDENT

THIS ITA IS FILED UNDER SECTION 260A OF INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 30.12.2014 PASSED IN ITA NO.1048/BANG/2014 FOR THE ASSESSMENT YEAR 2008-2009 PRAYING TO FORMULATE THE SUBSTANTIAL QUESTION OF LAW STATED ABOVE AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDERS PASSED BY THE ITAT, BANGALORE IN ITA NO.1048/BANG/2014 DATED 30.12.2014 AND CONFIRM THE ORDER OF THE APPELLATE COMMISSIONER CONFIRMING THE ORDER PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-5(1), BANGALORE.

THIS ITA COMING ON FOR ADMISSION THIS DAY, VINEET SARAN,, J., DELIVERED THE FOLLOWING:

J U D G M E N T

Heard Sri K V Aravind, learned counsel for the appellants and perused the record.

2.

This appeal has been filed against the order of the Tribunal, whereby the Tribunal has held that while issuing notice imposing penalty under Section 271(1)(c) of the Income Tax Act, it would be necessary to specify in the notice as to whether the assessee has concealed the particulars of his income or furnished inaccurate particulars of such income. In the absence of Assessing Officer recording the specific ground on which the notice was being issued,

penalty cannot be imposed, as has been held by the Division Bench of this Court in the case of Commissioner of Income Tax & Anr. –vs- Manjunatha Cotton & Ginning Factory reported in (2013) 92 DTR 0111 (Kar). In paragraph-61 of the said judgment, it has been held as under: “61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in 292 ITR 11 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in 171 Taxmn 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the

case for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind.”

In view of the above, we do not find that any substantial question of law arises in this appeal for determination by this court.

The appeal is accordingly dismissed.

Sd/- JUDGE

Sd/- JUDGE

Bkm

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