2017 (4) TMI 407

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....or several Assessment Years [AY]. Since, the issue springs out from common set of facts, we dispose-off all the appeals by way of this common order for the sake of convenience and brevity. First, we take up ITA NO. 3861/Mum/2015 for AY 2006-2007 filed by Shri Anil Kumar Surekha, where the assessee is aggrieved by confirmation of penalty of Rs. 4,13,659/- u/s 271(1)(c) vide Ld. CIT(A) order dated 04/03/2015. 2. Briefly stated, the assessee, being resident individual was subjected to an assessment u/s 153A read with section 143(3) of the Income Tax Act, 1961 for impugned AY vide Assessing Officer [AO] order dated 22/03/2013 consequent to search & seizure action u/s 132(1) in case of M/s Ispat Industries Limited and its group concerns. The ....

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....he revenue and therefore, penalty could not be levied. Further, the difference in the two incomes arose only due to certain interest on Bank deposits whereas all the accounts held by the assessee were duly disclosed in the original return of income and hence, there was no mala-fide intention to evade the taxes and the assessee reflected the correct income after realizing the mistake, which was finally accepted by the revenue. The revenue has nowhere disturbed the income returned by the assessee and therefore, penalty deserves to be deleted. Further, our attention has been drawn to the fact that the penalty has been initiated in the assessment order for 'concealment of particulars of income' whereas the penalty has finally been levied for 'f....

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....te that the penalty has been initiated on one limb but finally imposed for another limb. Further, the show-cause notice u/s 274 read with section 271 issued to the assessee did not specify the limb for which the penalty proceedings were being initiated against the assessee which took away a valuable right of the assessee and therefore, vitiates the penalty proceedings. Our view stands fortified by the above-cited judgment of Apex Court where the decision of Hon'ble Karnataka High Court has been confirmed, which in turn, relied upon the judgment of same court in CIT Vs Manjunatha Cotton & Ginning Factory [359 ITR 565]. Respectfully following the settled judicial discipline / precedent, we hold the penalty proceedings to be bad in law and the....