The notice of penalty is issued to the assessee must indicate whether the AO is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity.

PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) VS GOA COASTAL RESORTS AND RECREATION PVT. LTD. - (HIGH COURT)

Both the CIT (A ) as well as the ITAT had categorically held t hat in the present case, there wa s no record of satisfaction by the AO that there was any concealment of income or that any inaccurate particulars were furnished by the assessee. This being a sine qua non for initiation of penalty proceedings, in the absence of such pe tition, it was held that the two authorities had quite correctly ordered the dropping of penalty proceedings against the petitioner. Besides, it was note d that the Court in the case of Commissioner of Income Tax-11 v/s. Shri Samson Perinchery, [(2017) 392 ITR 4] had held that the notice which is issued to the assessee must indicate whether the AO is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. If the notice is issued in the printed form, then, the necessary portions which are not applicable are required to be struck off, so as to indicate with clarity the nature of the satisfaction recorded. In the present case thus, revenue’s appeal was dismissed. (Para 5 & 6)

1. Heard Ms Razaq, learned Advocate for the appellant and Shri. Rao, learned Advocate for the respondent No.2.

2. Ms. Razaq, learned Advocate for the appellant urges admission of this appeal on the following substantial questions of law:

i) Whether on the facts and in the circumstances of the case, the Tribunal is right in law and fact, in deleting the penalty levied u/s. 271(1) (c) of the Income Tax Act, 1961?

3. Ms Razaq, learned Advocate submits that in this case the revised returns filed by the respondents indicated that the disclosures were made only by piecemeal. Relying upon Mak Data (P.) Ltd v/s. Commissioner of Income Tax 1 , she submits that such disclosure does not relieve the assessee of the requirement of paying penalty. He submits that the assessment order in the present case makes reference to concealment and/or inaccurate particulars. In this view of the matter, she submits that the substantial questions of law as aforesaid will be arises and the view taken by the Commissioner (Appeals) as well as the ITAT in relation the deletion of penalty, warrants interference.

4. Mr Rao, learned Advocate for the assessee points out that there is absolutely no finding as regards concealment or furnishing of inaccurate particulars. He further points out that in the notice issued to the assessee on 30/09/2016, the Deputy Commissioner had not even bothered to strike down the relevant portion of the printed form in order to indicate whether the satisfaction is based upon the concealment of particulars or furnishing of inaccurate particulars. He relies on Commissioner of Income Tax-11 v/s. Shri Samson Perinchery2 and Principal Commissioner of Income Tax v/s. New Era Sova Mine3 to submit that on the basis of such a defective notice, award of penalty can never be sustained.

5. We have carefully examined the record as well as duly considered the rival contentions. Both the Commissioner (Appeals) as well as the ITAT have categorically held that in the present case, there is no record of satisfaction by the Assessing Officer that there was any concealment of income or that any inaccurate particulars were furnished by the assessee. This being a sine qua non for initiation of penalty proceedings, in the absence of such petition, the two authorities have quite correctly ordered the dropping of penalty proceedings against the petitioner.

6. Besides, we note that the Division Bench of this Court in Samson(supra) as well as in New Era Sova Mine(supra) has held that the notice which is issued to the assessee must indicate whether the Assessing Officer is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. If the notice is issued in the printed form, then, the necessary portions which are not applicable are required to be struck off, so as to indicate with clarity the nature of the satisfaction recorded. In both Samson Perinchery and New Era Sova Mine(supra), the notices issued had not struck of the portion which were inapplicable. From this, the Division Bench concluded that there was no proper record of satisfaction or proper application of mind in matter of initiation of penalty proceedings.

7. In the present case, as well if the notice dated 30/09/16 (at page 33) is perused, it is apparent that the relevant portions have not been struck off. This coupled with the fact adverted to in paragraph (5) of this order, leaves no ground for interference with the impugned order. The impugned order are quite consistent by the law laid down in the case of Samson Perinchery and New Era Sova Mine(supra) and therefore, warrant no interference.

8. The contention based upon MAK Data (P.) Ltd.(supra) also does not appeal to us in the peculiar facts of the present case. The notice in the present case is itself is defective and further, there is no finding or satisfaction recorded in relation to concealment or furnishing of inaccurate particulars.

9. For the aforesaid reasons, we hold that no substantial questions of law arises in this appeal. Consequently, this appeal is dismissed.

NUTAN D. SARDESSAI, J. M. S. SONAK, J.

Similar Ripples

Questions

There is no question

The notice of penalty is issued to the assessee must indicate whether the AO is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity.

Write your Comment

Generic

Reportdata/5337.pdf

Would you like to edit this news ? Edit

Select Format

You get opportunity to take 30 day Challenge program.

Optional

Advanced

You get opportunity to take 30 day Challenge program.

Optional

Add tags

You get opportunity to take 30 day Challenge program.

Optional

PUBLISH IT

Don't sell
PUBLISH IT
Publish privately
SAVE AS DRAFT

Dont't publish now

Both the CIT (A ) as well as the ITAT had categorically held t hat in the present case, there wa
s no record of satisfaction by the AO that there was any concealment of income or that any
inaccurate particulars were furnished by the assessee. This being a sine qua non for initiation
of penalty proceedings, in the absence of such pe tition, it was held that the two authorities
had quite correctly ordered the dropping of penalty proceedings against the petitioner.
Besides, it was note d that the Court in the case of Commissioner of Income Tax-11 v/s. Shri
Samson Perinchery, [(2017) 392 ITR 4] had held that the notice which is issued to the
assessee must indicate whether the AO is satisfied that the case of the assessee involves
concealment of particulars of income or furnishing of inaccurate particulars of income or both,
with clarity. If the notice is issued in the printed form, then, the necessary portions which are
not applicable are required to be struck off, so as to indicate with clarity the nature of the
satisfaction recorded. In the present case thus, revenue’s appeal was dismissed.

(Para 5 & 6)

1. Heard Ms Razaq, learned Advocate for the appellant and Shri.
Rao, learned Advocate for the respondent No.2.
 2. Ms. Razaq, learned Advocate for the appellant urges
admission of this appeal on the following substantial questions of
law:
i) Whether on the facts and in the circumstances of
the case, the Tribunal is right in law and fact, in
deleting the penalty levied u/s. 271(1) (c) of the
Income Tax Act, 1961?
 3. Ms Razaq, learned Advocate submits that in this case the
revised returns filed by the respondents indicated that the
disclosures were made only by piecemeal. Relying upon Mak Data
(P.) Ltd v/s. Commissioner of Income Tax
1
, she submits that such
disclosure does not relieve the assessee of the requirement of paying
penalty. He submits that the assessment order in the present case
makes reference to concealment and/or inaccurate particulars. In
this view of the matter, she submits that the substantial questions of
law as aforesaid will be arises and the view taken by the
Commissioner (Appeals) as well as the ITAT in relation the deletion
of penalty, warrants interference.
 4. Mr Rao, learned Advocate for the assessee points out that
there is absolutely no finding as regards concealment or furnishing
of inaccurate particulars. He further points out that in the notice
issued to the assessee on 30/09/2016, the Deputy Commissioner
had not even bothered to strike down the relevant portion of the
printed form in order to indicate whether the satisfaction is based upon the concealment of particulars or furnishing of inaccurate
particulars. He relies on Commissioner of Income Tax-11 v/s. Shri
Samson Perinchery2

and Principal Commissioner of Income Tax v/s.

New Era Sova Mine3

to submit that on the basis of such a defective

notice, award of penalty can never be sustained.
 5. We have carefully examined the record as well as duly
considered the rival contentions. Both the Commissioner (Appeals)
as well as the ITAT have categorically held that in the present case,
there is no record of satisfaction by the Assessing Officer that there
was any concealment of income or that any inaccurate particulars
were furnished by the assessee. This being a sine qua non for
initiation of penalty proceedings, in the absence of such petition,
the two authorities have quite correctly ordered the dropping of
penalty proceedings against the petitioner.
 6. Besides, we note that the Division Bench of this Court in
Samson(supra) as well as in New Era Sova Mine(supra) has held
that the notice which is issued to the assessee must indicate whether
the Assessing Officer is satisfied that the case of the assessee
involves concealment of particulars of income or furnishing of
inaccurate particulars of income or both, with clarity. If the notice is
issued in the printed form, then, the necessary portions which are
not applicable are required to be struck off, so as to indicate with
clarity the nature of the satisfaction recorded. In both Samson
Perinchery and New Era Sova Mine(supra), the notices issued had
not struck of the portion which were inapplicable. From this, the
Division Bench concluded that there was no proper record of
satisfaction or proper application of mind in matter of initiation of
penalty proceedings.
 7. In the present case, as well if the notice dated 30/09/16 (at
page 33) is perused, it is apparent that the relevant portions have
not been struck off. This coupled with the fact adverted to in
paragraph (5) of this order, leaves no ground for interference with
the impugned order. The impugned order are quite consistent by
the law laid down in the case of Samson Perinchery and New Era
Sova Mine(supra) and therefore, warrant no interference.
 8. The contention based upon MAK Data (P.) Ltd.(supra) also
does not appeal to us in the peculiar facts of the present case. The
notice in the present case is itself is defective and further, there is no
finding or satisfaction recorded in relation to concealment or
furnishing of inaccurate particulars.
 9. For the aforesaid reasons, we hold that no substantial
questions of law arises in this appeal. Consequently, this appeal is
dismissed.
 NUTAN D. SARDESSAI, J. M. S. SONAK, J.

and Principal Commissioner of Income Tax v/s.

New Era Sova Mine3

to submit that on the basis of such a defective

Hi Thakurani,
I want to withdraw in my Thakurani wallet
Thanks,

Select the reason for validity check

I feel great..the news is still good.please give the reason too..thanks..

Why do you think the News as invalid?” Please mention the reason.

I appreciate your effort. May I request you to select one of the reasons from below.
I am marking this post and your reason to Thakurani Moderators. They will take appropriate action.
Thanks,

Write your reason

My Dear ,

Harassing

Spam

Ingenuine

Rotten

Alien

Plagiarism

Unformatted

The notice of penalty is issued to the assessee must indicate whether the AO is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity.