AI Drafter 
TaxTMI 
TaxTMI 
2018 (3) TMI 883
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.... 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the penalty levied on said addition is not tenable as the disallowance itself is against facts and hence not sustainable. 4. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in levying a penalty ignoring the fact that no penalty can be levied merely on the disallowance of an expenditure. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in passing an order without giving assessee an opportunity of being heard in clear violation of principle of natural justice. 6 On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in confirming levy of penalty by the ld. AO under section 271(1)(c) despite the fact that there is neither concealment nor furnishing of inaccurate particulars. 7 On the facts and circumstances of the case, the ld. CIT(A) has erred both on facts and in law in confirming levy of penalty made by the ld. AO ignoring the fact that the penalty proce....
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....tice dated 24.12.2009 are reproduced as under:- ".....it appears to me that you:- *have without reasonable cause failed to comply with a notice under section 22(4)/23(2) of the Indian Income Tax Act, 1922 or under section 142(1)/143(2) of the Income Tax Act, 1961. * have concealed the particulars of your income or .........................furnished inaccurate particulars of such income................." 6.1 After perusing the aforesaid contents of the Notice dated 24.12.2009, we are of the view that the AO has initiated the penalty for concealment of particulars of income or furnishing of inaccurate particulars, which is contrary to the provisions of law. We are of the view that notice issued by the AO u/s. 271(1)(c) read with Section 274 of the Act is bad in law as it does 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. Therefore, the penalty in dispute is not sustainable in the eyes of law, hence, we cancel the penalty in dispute. Our aforesaid view is supported by the following decisions:- i....
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....culars of income or concealment of income as well as in the penalty order dated 30.9.2013 AO has stated that he is satisfied that the assessee has concealed particulars of his income, which is contrary to law. In view of above, the penalty is not sustainable in the eyes of law. Our aforesaid view is fortified by the following decisions:- 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, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner of Income Tax vs. Manjunatha Cotton and Ginning Factory (2013) (7) TMI 620- Karanataka High Court. Thus since the matter is covered by judgment of the Division Bench of this Court, we ar....
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....convenience, the relevant para no. 5.3.1 of the impugned order passed by the Ld. CIT(A) is reproduced as under:- "5.3.1 The above findings of the Ld. CIT(A) clearly establishes that the appellant has concealed the income of Rs. 26,50,500/- and did not declare in the return of income inspite of admitting a disclosure of Rs. 40,00,000/- during survey. Thus, the appellant has furnished inaccurate particulars of his income. The facts of the case clearly reveal that the appellant tried to evade payment of taxes by furnishing inaccurate particulars of income. Therefore, I hold that the AO was fully justified in levying the penalty u/s. 271(1)(c) of the Act. The penalty levied by the AO is upheld. This ground of appeal is rejected." 8. Keeping in view of the aforesaid finding of the Ld. CIT(A), we are of the considered view that the AO has passed the assessment order wherein the AO has recorded his satisfaction on the page 2, 2nd para viz. "I am satisfied that it is a fit case for initiation of penalty proceedings u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income/concealment of income." Further the A....