2018 (12) TMI 1591

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....f the Income Tax Act 1961, (the 'Act'). 2. The grounds of appeal read as under: 1) That the learned CIT(A) has grossly erred in law and on facts and circumstances of the appellant's case in confirming the levy of penalty u/s 271(1)(c) of the Income Tax Act on the following additions: i) Disallowance of legal expenses of Rs. 36,91,125/- relating to Gillette, USA and ii) Disallowance of expenditure for increase in its authorized share capital included in deduction u/s 35D amounting to Rs. 4,50,000/-. 2) That the order passed by the CIT(A) confirming the penalty u/s 271(1)(c) is bad in law. 3) That the learned CIT(A) has grossly erred in law in concluding that the appellant had furnished inac....

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....efore Hon'ble ITAT, 8) That the CIT(A) ought to have appreciated that unless the claims made are found to be malafide, no penalty is leviable u/s 271(1)(c). 2.1 Further, the assessee has filed an additional ground which is as under: 1. On the facts and in circumstances of the case and in law, the CIT(A) erred in upholding the penalty levied by the AO u/s. 271(1)(c) of the Act without appreciating the fact that the penalty was levied without proper application of mind by the AO. 2. The Learned CIT(A) erred in not appreciating the fact that a. mere mention of "Penalty proceedings u/s 271(1)(c) have been initiated separately" in Assessment order, does not amount to a direction under section 271(1)(c) ....

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....N. Shroff v. JCIT (2007) 291 ITR 519 (SC). 4. On the other hand, the Ld. DR relies on the decision in M/s Maharaj Garage & Co. v. CIT (Income Tax Reference No. 21 of 2008) of Bombay High Court. 5. We have heard the rival submissions and perused the relevant materials on record. In the case of M/s Maharaj Garage & Co. (supra), relied on by the Ld. DR, the basic question urged before the Court was whether while granting previous approval by the Inspecting Assistant Commissioner, as required under the proviso below section 271(1)(c)(iii) of the Act, the assessee was required to be given a reasonable opportunity of being heard? This is not so in the present case. Therefore, the ratio laid down therein is not applicable in the instant case....