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

ITA/220/2015

AI Insights

The case involves an appeal by the Commissioner of Income-Tax and the Deputy Commissioner of Income-Tax against Smt. Latha Ramachandra Inamdar, the proprietor of Trupti Nursing Home. The appeal was filed under Section 260A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal (ITAT), Bangalore, which had set aside a penalty imposed by the Assessing Officer for the assessment year 2008-2009. The ITAT's decision was based on the lack of specificity in the penalty notice regarding whether the assessee had concealed income or furnished inaccurate particulars, a requirement emphasized by the Karnataka High Court in previous rulings.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 728834 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 07-09-2015
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax & Anr. vs. Manjunatha Cotton & Ginning Factory, Ashok Pai vs. Commissioner of Income Tax, MANU ENGINEERING vs. Commissioner of Income Tax, VIRGO MARKETING vs. Commissioner of Income Tax
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: K V ARAVIND; G KAMALADHAR
• Keywords: Assessing Officer; Concealment of income; Furnishing inaccurate particulars; Income Tax; Notice; Penalty
• Section: 271(1)(c); 260A

Judgement Text

" 1 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 2 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, 3 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 4 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 "