2019 (8) TMI 765

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....peals are common, the appeal in ITA No.880/PUN/2017 for the assessment year 2005-06 taken as the lead case for adjudication. ITA No.880/PUN/2017 - A.Y. 2005-06 3. The grounds raised by the assessee in this appeal are as under :- "1. Commissioner Appeals has erred in confirming the Penalty levied by Assessing Officer of Rs. 12,36,651/-. Same may please be cancelled. 2. Appellant prays to hold that Penalty Order and Notices u/s 271(1)(c) are bad in law. 3. Appellant prays for just and equitable relief. 4. Without prejudice to grounds and without accepting that Penalty is leviable. If it is held leviable, CIT(A) should have excluded the amount of relief granted by ITAT and Income returned u/s 153A. 5. Appellant prays to add, alter,....

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.... on the legal issue relating to the ambiguity in the mind of the Assessing Officer while dealing with the initiation and levy of penalty. Highlighting the legal requirement of making a specific reference to the specific limb of clause (c) of section 271(1) of the Act and relying on various binding judgments in the case CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom.) as well as the judgment of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory 359 ITR 565, Ld. Counsel demonstrated that the penalty levied by the Assessing Officer is unsustainable in law and the same is wrongly upheld by the CIT(A). 9. On the other hand, ld. DR for the Revenue heavily relied on the orders of the authorities below....

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....ew that such penalty is unsustainable in law legally. It is a settled legal proposition that the Assessing Officer is under obligation to specify the appropriate limb of clause (c) of section 271(1) of the Act at the time of initiation as well as at the time of levy of penalty. In view of the above deliberation on this issue, without going into the merits of the case, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the entire penalty imposed by him. Accordingly, the legal ground raised by the assessee is allowed. 15. Considering the relief to the assessee on legal issue, the adjudication of the other grounds on merits of penalty becomes an academic exercise only. Accordingly, the said grounds are dismissed a....