2017 (9) TMI 1101

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....raised by the assessee is against the confirmation of penalty by the ld.CIT(A) as imposed by the AO under section 271(1)(c) of the Income Tax Act, 1971. 3. The facts of the case are that the assessee filed return of income on 23.11.2006 declaring loss of Rs. 4,14,62,374/-. The loss of the assessee was assessed at Rs. 2,96,06,860/- vide assessment order dated 15.10.2008 passed under section 143(3) by making some disallowances namely of depreciation of Rs. 23,45,989/-, professional fees of Rs. 66,64,415/- and of Rs. 49,19,714/- out of expenses claimed under the income from house property. In the assessment order, the penalty proceedings u/s 2721(1)(c) of the Act was initiated separately for furnishing inaccurate particulars of income where....

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....ed the repairs & maintenance expenses to the extent of Rs. 22,50,414/- on the house property over and above 30% deduction on Annual Let out value. Thus it was not a case that the issues were debatable or there were two views. The explanation given for such claim also is not found bonafide. Mere assertion that it was inadvertent mistake is also not enough to absolve the assessee from levy of penalty. Thus keeping In view the ratio of decisions given In the aforesaid judgments. discussed in para 4.2 &: 4.3, it is held that the AO has rightly imposed penalty u/s 271 (1 )(e), however, the quantum of penalty needs to be recomputed onto the total amount of addition of Rs. 69,06,626/-. This would reduce the amount of penalty. The AO is directed to....

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....r of decisions namely CIT V/s Manjunath Cotton and Ginning Factory reported in 359 ITR 565(Kar), CIT V/s SSA's Emerald Meadows (SLP) (SC) 380 of 2015 of Karnataka High Court and CIT V/s Shri Samson Perinchery in 1154 of 2014 Bombay High Court. 7. On the other hand, the ld.DR relied on the orders of authorities below and also submitted that the objection specific charge raised by the ld.AR at this stage was never raised before the ld.CIT(A) or before the AO and therefore should not be entertained and the order of the ld.CIT(A) should be upheld. 8. We have heard both the parties on the issue perused the materials placed before us including the impugned order. A perusal of the notice issued u/s 271(1)( c ) r.w.s.274 of the Act reveals th....

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....rder imposing a penalty on you should not be made under section 271(1)( c ) of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)( c ). (R P Rastogi) ACIT Circle 2(2), Mumbai. We also reproduce the copy of the order dated passed by ACIT-2(2) dated 15.10.2008 as under : NOTICE U/S 274 R.W.S.271 OF THE INCOME TAX ACT, 1961. Pen.14/103/08-09 Asst.CIT Circle-2(2), Aayakar Bhavan, 5th floor, Room 577, M K Road, Mumbai-400020 ....

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....er section 271(1)( c ). Asstt.Comm.of Income Tax -2(2), Mumbai. 9. We find merit in the arguments of the ld.AR that it is mandatory on the part of the AO to point out the specific charge and strike off one of the two charges contained in the notice issued u/s 271(1)( c ) r.w.s.274 falling which the proceedings u/s 271(1)( c ) of the Act and consequent order were to be quashed. The ld. AR also submitted that the Hon'ble High Court of Karnataka in the case of CIT V/s Manjunath Cotton and Ginning Factory reported in 359 ITR 565 held that the AO has to mention specific charge in the notice whether the penalty is for concealment of income or for furnishing inaccurate particulars of income and has to strike off the charge not applicable. In....