B.J. Honnashetty (HUF) v. The Income-tax Officer, Ward–3, Mandya
[Citation -2019-LL-0906-71]

Citation 2019-LL-0906-71
Appellant Name B.J. Honnashetty (HUF)
Respondent Name The Income-tax Officer, Ward–3, Mandya
Court ITAT-Bangalore
Relevant Act Income-tax
Date of Order 06/09/2019
Assessment Year 2010-11
Judgment View Judgment
Keyword Tags furnishing of inaccurate particulars of income • opportunity of being heard • concealment of income • mechanical manner • levy of penalty • show-cause notice • absence of specific charge
Bot Summary: 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. 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. 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. 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. You are hereby requested to appear before me at 11.30 a.m. on ITA No. 2534/Bang/2018 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. As per the judgment of Hon'ble Karnataka High Court rendered in the case of CIT Vs. Manjunatha Cotton and Ginning Factory, it is held that the allegation in the notice regarding default for which penalty is proposed to be levied should be clear so that assessee can make proper compliance. In the present case, the allegation is not clear that whether allegation is regarding concealment of income or furnishing of inaccurate particulars of income and hence, in the facts of present case, we respectfully follow the judgment of Hon'ble Karnataka High Court and hold that the penalty is not sustainable and therefore, delete the same.


IN INCOME TAX APPELLATE TRIBUNAL BENCH BANGALORE BEFORE SHRI ARUN KUMAR GARODIA, ACCOUNTANT MEMBER AND SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA No. 2534/Bang/2018 Assessment Year 2010-11 Shri B.J. Honnashetty (HUF), Income Tax No. 212, Nelligudda Tank Road, Officer, Vs. Bidadi 562 109. Ward 3, PAN: AAGHB9183B Mandya. APPELLANT RESPONDENT Assessee by Smt. Sheetal Borkar, Advocate Revenue by Shri Vikas Suryavamshi, Addl. CIT (DR) Date of hearing 30.07.2019 Date of Pronouncement 06.09.2019 ORDER Per Shri A.K. Garodia, Accountant Member This appeal is filed by assessee and same is directed against order of ld. CIT(A)-3, Bangalore dated 14.06.2018 for Assessment Year 2010-11. 2. grounds raised by assessee are as under. 1. Ld. CIT (A) erred in passing order in manner which he did. 2. learned CIT(A) ought to have appreciated that there being no concealment or furnishing of inaccurate particulars of income, levy of penalty under Section 271(1)(c) was unwarranted. 3. learned CIT(A)erred in confirming penalty which was not indicating as to proceedings had been initiated either for concealment of income or furnishing of inaccurate particulars in show cause notice, penalty proceedings confirmed were bad in law and consequently penalty levied is also bad in law and liable to be deleted as held by jurisdictional High Court, and accordingly penalty is liable to be cancelled. 4. learned CIT(A) ought to have appreciated that Appellant had disclosed all materials and given explanation towards justification of claim and accordingly there was no reason to hold that Appellant had concealed income or furnished inaccurate particulars to justify levy of penalty under Section 271(1)(c) of Act. ITA No. 2534/Bang/2018 Page 2 of 3 5. CIT(A) ought to have appreciated that having issued notice under section 274 read with section 271(1)(c) of Act in mechanical manner, penalty order passed under section 271(1)(c) of Act is not sustainable in eye of law. 6. Appellant begs to submit that decision of jurisdictional High Court in case of CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Karn) is squarely applicable and therefore impugned order of authorities below is required to be set aside. 7. Without prejudice, 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 time of hearing, Appellant prays that appeal may be allowed. 3. It was submitted by ld. AR of assessee that on page no. 59 of paper book is notice issued by AO u/s. 274 r.w.s. 271 of IT Act, 1961 on 28.03.2013. She pointed out that in said notice, it is stated by AO that assessee have concealed particulars of income or have furnished inaccurate details of such income. She pointed out that hence, allegation of AO is not clear as to whether allegation is regarding concealment of income or furnishing of inaccurate particulars of income. She submitted that under these facts, judgment of Hon'ble Karnataka High Court rendered in 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 facts of present case, penalty imposed by AO is not sustainable. ld. DR of revenue supported orders of authorities below. 4. We have considered rival submissions. First of all we reproduce contents of notice issued by AO u/s. 274 r.w.s. 271 of IT Act, 1961 from page no. 59 of paper book. content of notice is reproduced hereinbelow. Whereas in course of Proceedings before me for Assessment Year 2010-11, it appears to me that you:- "have concealed 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 ITA No. 2534/Bang/2018 Page 3 of 3 15/04/2013 and show cause why order imposing penalty on you should not be made under Sec.271(1)(c) of 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 said date which will be considered before any such order is made under Sec.271. 5. As per judgment of Hon'ble Karnataka High Court rendered in case of CIT Vs. Manjunatha Cotton and Ginning Factory (supra), it is held that allegation in notice regarding default for which penalty is proposed to be levied should be clear so that assessee can make proper compliance. In present case, allegation is not clear that whether allegation is regarding concealment of income or furnishing of inaccurate particulars of income and hence, in facts of present case, we respectfully follow judgment of Hon'ble Karnataka High Court and hold that penalty is not sustainable and therefore, delete same. 6. In result, appeal filed by assessee is allowed. Order pronounced in open court on date mentioned on caption page. Sd/- Sd/- (PAVAN KUMAR GADALE) (ARUN KUMAR GARODIA) Judicial Member Accountant Member Bangalore, Dated, 06th September, 2019. Copy to 1. Appellant 4. CIT(A) 2. Respondent 5. DR, ITAT, Bangalore 3. CIT 6. Guard file By order Assistant Registrar, Income Tax Appellate Tribunal, Bangalore. B.J. Honnashetty (HUF) v. Income-tax Officer, Ward3, Mandya
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