2014 (5) TMI 776

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.... admitted on 18.8.2008 to consider the following substantial questions of law:- i) Whether in the facts and circumstances of the case, by virtue of the amendment inserted by Finance Act, 2008 w.e.f 1.4.1989, issuance of notice for imposition of penalty is sufficient compliance for initiation of penalty proceedings under section 271(1) (c)? ii) Whether on the facts and circumstances of the case, the Hon'ble Income Tax Appellate Tribunal is right in law in deleting the penalty levied by the Commissioner of Income Tax Appeals on different grounds, than what was levied by the Assessing Officer? 2. A few facts relevant for the decision of the controversy involved, as narrated in the appeal may be noticed. The assessee filed return on 31.10.20....

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....sed the record. 4. Learned counsel for the appellant contended that in view of the insertion of sub section (1B) in Section 271 of the Act by Finance Act, 2008 with effect from 1.4.1989, question No.1 deserves to be decided in favour of the revenue. As regards question No.2, it was urged that the Tribunal had erred in law in deleting the penalty levied under Section 271(1) (c) of the Act. 5. Taking up question No.1, we find that the Tribunal after examining the entire material before it came to the conclusion that the Assessing officer had not recorded any satisfaction while initiating the penalty proceedings and thus he had no jurisdiction to levy penalty under Section 271(1) (c) of the Act. Finance Act, 2008 effective retrospectively fr....

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....d in favour of the revenue. The initiation of penalty proceedings are held to be valid. 6. Adverting to question No.2, we proceed to examine whether the levy of penalty of Rs. 46,072/- by the Assessing Officer and upheld by CIT(A) in the facts and circumstances was justified. From the perusal of the order passed by the Assessing Officer, it is discernible that the Assessing officer imposed penalty under Section 271(1) (c) of the Act on the ground that amount of Rs. 1,31,262/- represented the cessation of liability under Section 41(1) of the Act and wrong disclosure of the balance payable to BPCL amounted to furnishing of inaccurate particulars of income. The CIT (A) held that the amount of Rs. 1,31,262/- was not on account of cessation of ....