2019 (5) TMI 291

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....Act, 1961 ( hereinafter referred to as 'the Act') and also that the penalty has been levied on disallowance made u/s.14A of the Act. 3. At the time of hearing, the Ld. AR of the assessee vehemently argued that both in the assessment order as well as penalty order, the limb for which penalty is being imposed, has not been specified. Moreover, the notice u/s.274 r.w.s. 271(1)(c) of the Act is also not clear as to the limb on which penalty has to be levied on the assessee. The ld. AR of the assessee relied on the present judgment of the Hon'ble Jurisdictional High Court in the case of CIT Vs. Samson Perinchery reported as 392 ITR 4 (Bom.) wherein the Hon'ble Bombay High Court has followed the view of Karnataka High Court in the case....

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....rticulars of income' in section 271(1)(c) carry different meanings/connotations and therefore, the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned u/s.271(1)(c) for initiation of penalty proceedings will not warrant/permit penalty being imposed for the other. The order imposing penalty has to be made only on the ground of which the penalty proceedings has been initiated, and it cannot be on a fresh ground of which the assessee has no notice. Therefore, where the Assessing Officer initiated penalty proceedings u/s.271(1)(c) for furnishing inaccurate particulars of income, the order imposing penalty for concealment of income was not valid. Reverting to the facts of the case the penalty notice is amb....

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....nterest on late payment Rs. 99,306/-. These two additions formed the bedrock of the edifice of instant penalty which came to be affirmed in the first appeal. The Delhi Bench of the Tribunal has deleted the penalty imposed on disallowance made u/s.14A of the Act by observing as under: "3. I have heard both the sides and perused the relevant material on record. It is evident from the discussion made above that such penalty has been imposed on making disallowance of certain expenses. But for that, there is nothing on record to show that the assessee lodged bogus claims in respect of these expenses. That apart, the expenses were claimed by the assessee in a bona fide manner. The mere fact that the above disallowances have been made do ....