AI Drafter 
TaxTMI 
TaxTMI 
2017 (12) TMI 257
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....2. The facts in brief are that assessee is an investment company and has made investment in the shares of closely held unquoted companies. The total amount of investment as on 31.3.2008 was Rs. 8,04,71,569/-. The Assessment in this case was made making the following additions:- a) Disallowance u/s. 14A Rs. 4,07,158/- b) Disallowance of Bad Debts Rs. 1,32,000/- c) Disallowance of return on Investments Rs. 10,84,005/- d) Disallowance on account of sale Of rights claimed as capital loss Rs. 91,39,000/- The disallowances made by the AO were confirmed by the Ld. CIT(A). Thereafter, the AO issued notice u/s. 274 read with Section 271(1)(c) of the I.T. Act, 1971 for levy of penalty. The penalty u/s. 271(1)(c)....
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....osed, two quantum addition has already been deleted by the ITAT, 'A' Bench, New Delhi in ITA No. 2375/Del/2013 (AY 2009-10) vide Order dated 05.08.2016. In this behalf he filed the copy of the Tribunal's Order dated 05.08.2016 in assessee's own case and requested that penalty in dispute may be deleted, because the assessee has not furnished any inaccurate particulars of income. It was further submitted that AO did not record his satisfaction for initiation of penalty proceedings and further that quantum and penalty proceedings are independent of each other and penalty cannot be imposed simply on the basis of finding recorded in the assessment order. Ld. Counsel of the Assessee has draw our attention towards the assessment order dated 30.12.....
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....w and also filed the written submissions, which are reproduced hereunder:- "Sub: Written Submission in the above case- reg. In the above case, it is humbly submitted that the following decisions may kindly be considered: 1. Union of India v. pharamendra Textile Processors [(2007) 295 ITR 244] (Copy Enclosed) where Hon'ble Supreme Court held that Penalty under section 271 (1)(c) is a civil liability for which willful concealment is not an essential ingredient for attracting the civil liability as is the case in the matter of proceedings under section 276C 2. CIT Vs Zoom Communication (P.) Ltd. [191 Taxman 179 (Delhi)/[2010] 327 ITR 510 (Delhi)/[2010] 233 CTR 465] where Hon'ble Delhi High Court held that If ....
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.... and perused the relevant records. We find that assessee had appealed before the Ld. CIT(A) against the quantum additions i.e. disallowance u/s. 14A amounting to Rs. 4,07,158/- and disallowance on account of long term capital loss treated as business income amounting to Rs. 91,39,000/-. However, the assessee did not press for other disallowances made on account of Bad Debts of Rs. 1,32,000/- and Disallowance of Expenses on account of return of investment of Rs. 10,84,005/-. We further find that in his appellate order dated 01.2.2013 the Ld. CIT(A) did not allow the appeal of the assessee and aggrieved with the action of the Ld. CIT(A), te assessee appealed before the Tribunal against disallowance u/s. 14A of Rs. 4,07,158/- and against Long ....
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....inaccurate particulars of income. Therefore, the entire penalty proceedings stand vitiated, because it is not in accordance with law, in view of the law settled in the following case laws. i) "CIT & Anr. Vs. M/s SSA's Emerald Meadows - 2015 (11) TMI 1620 - Karnataka High Court has held that Tribunal has correctly allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee,....