2016 (2) TMI 1215

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....ause notice that the AO has not specified the charge as to whether the notice was for non-compliance of notice u/s 142(1)/143(2) of the Act or for concealment of income or furnishing of inaccurate particulars of income. 2.1. None of the alternative columns were struck of by the A.O. Under these circumstances we have to quash the penalty levied by following the judgement of Hon'ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory, 359 ITR 565, wherein the Hon'ble High Court considered the entire case law on the subject of levy of penalty u/s 271(1)(c ) of the Act and summarized the law as follows. "Merely because the assessee agreed for addition does not lead to the inference that the said addition is on accou....

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....ls and the Commissioner. (i) The imposition of penalty is not automatic. (j) Imposition of penalty even if the tax liability is admitted is not automatic. (k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the Assessing Officer in the assessment order. (l) Only when no explan....