https://www.taxtmi.com/css/info/rss_sitemap/rss_feed.css?v=1746094055 https://www.taxtmi.com Business/Tax/Law/GST/India/Taxation/Policies/Legal/Corporate Tax/Personal Tax/Vat Law/Legal Information/Tax Information/Legal Services/Tax Services Tax Management India. Com / MS Knowledge Processing Pvt. Ltd. All rights reserved. One stop solution for Direct Taxes and Indirect Taxes https://www.taxtmi.com/caselaws?id=456266 https://www.taxtmi.com/caselaws?id=456266 Penalty u/s 271(1)(c) - allegation of defective notice - non striking off the irrelevant charge in the notice - assessee in compliance to the notice issued u/s 148, voluntarily disallowed expenditure in the Profit loss account and the returned loss was revised - HELD THAT:- The issue involved in the present case is squarely covered by the case of Meherjee Cassinath Holdings Private Limited [ 2017 (5) TMI 904 - ITAT MUMBAI ] wherein the Tribunal after deliberating at length on the issue under consideration in the backdrop of various judicial pronouncements had concluded that the non striking off the irrelevant charge in the notice clearly reflects the non application of mind by the A.O and would resultantly render the order passed u/s 271(1)(c) in the backdrop of the said serious infirmity as invalid and void ab initio. We thus in the backdrop of illegal assumption of jurisdiction on the part of the A.O as regards penalty imposed on the assessee u/s 271(1)(c), without putting it to notice as regards the default for which it was called upon to explain as to why no such penalty was liable to be imposed in its hands, therefore, on the said count itself quash the penalty imposed in the hands of the assessee. Disallowance of expenses voluntarily - We may herein observe that as the genuineness and veracity of the expenses claimed by the assessee in respect of the payments made to Tuticorin Trexim Pvt. Ltd. had not been disproved by the revenue, therefore, simply on the basis of the unsubstantiated statement of Mr. Praveen Agarwal, which as observed by us hereinabove had not seen the light of the day and fructified into a concrete evidence on the basis of which the claim of the assessee as regards the veracity of the aforesaid expenses could safely be dislodged, no penalty under Sec. 271(1)(c) could have been validly imposed in the hands of the assessee As the contention of the assessee that its claim of expense was in respect of genuine transactions with M/s Tuticorin Trexim Pvt. Ltd and had been disallowed only with the intent to avoid protracted litigation on the said issue, had not been disproved by the revenue on the basis of any concrete material made available on record, therefore, no penalty under Sec. 271(1)(c) on the said count also could not have been imposed in the hands of the assessee. As persuaded with the view taken by the CIT (A) that as the assessee had already disallowed the expenses in the return of income filed in compliance to notice issued under Sec. 148 of the Act, which was accepted by the A.O, as such, therefore, in the absence of any addition or disallowance made in respect of the same by the A.O while framing the reassessment, no penalty under Sec. 271(1)(c) could have validly been made in the hands of the assessee. A.O had erred both in law and facts of the case in imposing penalty under Sec. 271(1)(c) in the hands of the assessee. Decided against revenue. Case-Laws Income Tax Fri, 16 Mar 2018 00:00:00 +0530