2018 (8) TMI 842

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....ssessee is a land developer. A search and seizure action u/s. 132(1) of the Act was carried out on Jadhav-Shah Group on 08-02-2008. The residential and business premises of the assessee were covered under the search and seizure action. In response to the notice u/s. 153A of the Act, the assessee filed return of income on 29-09-2008 declaring total income of Rs. 34,99,270/-. The assessee in the return of income disclosed additional income of Rs. 12,00,000/-. The Assessing Officer during the assessment proceedings made various additions/disallowances in the income returned by the assessee. The Assessing Officer recorded satisfaction for initiating penalty proceedings u/s. 271(1)(c) in respect of additional income of Rs. 12,00,000/- declared b....

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.... are being initiated on additional income declared by the assessee. The ld. AR further submitted that in respect of undisclosed interest income of Rs. 1,12,000/-, the Assessing Officer initiated penalty proceedings for concealment of income. While passing order levying penalty u/s. 271(1)(c), the Assessing Officer has not levied penalty on additional income Rs. 12,00,000/- declared by the assessee in the return of income. Whereas, in respect of addition of Rs. 1,12,000/- penalty u/s. 271(1)(c) has been levied for furnishing inaccurate particulars of income and concealing the particulars of income. The Assessing Officer has invoked both the limbs of section 271(1)(c). The manner in which satisfaction has been recorded and penalty has been le....

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....tion of any charge for which penalty is being levied under the provisions of section 271(1)(c) of the Act. It is not decipherable from the satisfaction recorded by the Assessing Officer as to under which limb of section 271(1)(c) penalty proceedings are initiated in respect of addition of Rs. 12,00,000/-. The recording of satisfaction without mentioning of specific charge is against the principles of natural justice. The assessee should know the specific charge against which he has to defend in penalty proceedings. Thus, manner in which satisfaction has been recorded for levy of penalty u/s. 271(1)(c) in respect of addition of Rs. 12,00,000/- falls short of legal requirements and hence is not sustainable in the eye of law. 7. It is furth....

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.... the penalty order levying penalty in respect of addition of Rs. 1,12,000/- reads as under : "7. After going through the reply of the assessee, facts on record and in view of the above discussion, I am of the opinion that the assessee has furnished inaccurate particulars of income and has concealed the particulars of his income knowingly in the meaning of section 271(1)(c) of the I.T. Act 1961. Therefore, it is a fit case." 10. A conjoint reading of satisfaction recorded and the order levying penalty shows that there was ambiguity in the mind of Assessing Officer while levying penalty. The satisfaction has been recorded for concealment and penalty has been levied for both the charges i.e. inaccurate particulars of income and con....