AI Drafter 
TaxTMI 
TaxTMI 
2019 (10) TMI 511
X X X X Extracts X X X X
X X X X Extracts X X X X
....or furnishing inaccurate particulars of income. 3. In the facts and circumstances of the case the ld. CIT(A) has erred in confirming the penalty of Rs. 2,40,000/-u/s 271(1)(c) of the I.T. Act, 1961.'' 2.1 Brief facts of the case are that the assessee filed the return of income for the year under consideration declaring loss of Rs. (-)17,41,988/- on 22-09-2012. The return was processed u/s 143(1) of the Act and subsequently after completion of scrutiny proceedings the assessment u/s 143(3) of the Act was completed on the total income of Rs. 1,19,08,010/-. 2.2 Aggrieved by the order of the AO, the assessee preferred appeal before the ld. CIT(A) who after considering the case of both the parties dismissed the appeal of the assessee by confirming the addition made by the AO. 2.3 Now aggrieved by the order of the ld. CIT(A), the assessee has preferred an appeal before the Tribunal. The Tribunal has decided the issue as under:- (i) Addition made by the AO and upheld by the ld. CIT(A) of Rs. 79,50,00/- was deleted. (ii) Addition made by the AO and upheld by the ld. CIT(A) of Rs. 49,00, 000/- was set aside. (iii) Addition made by the AO and uphe....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nbsp; dated 15-03-2015 PAN No. AAECH0234D To M/s. Gohal Salt Pvt. Limited K-23, Sapphire Haritage, Malaviya Nagar C-Scheme, Jaipur (Raj.) 302 001 Sir/Madam Whereas in the course of proceedings before me for the Assessment Year 2012-13, it appears that you have concealed the particulars of your income or furnished inaccurate particulars of such income. You are hereby requested to appear before me on 20-04-2015 at 11.00AM and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If no one attends this office on the said date of hearing, the case shall be decided on the basis of material available on records. Yours faithfully SEAL  ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... notice has been issued in a very routine manner and without application of mind as it nowhere specifies concealed/inaccurate particulars of income on which assessee was required to show cause. Even the said show cause notes issued by the AO does not indicate any ground for levy of penalty for which the assessee could put its defence. In this respect, we rely on the decision of Hon'ble Karnataka High Court in the case of CIT vs Manjunath Cotton and Ginning Factory 359 ITR 565 wherein it was held that notice u/s 274 of the I.T. Act, 1961 should specifically state whether penalty is being proposed to the imposed or conceal of income or for furnishing of inaccurate particulars of income. In the case of the assessee, the AO has not done so. In view of this the very initiation of penalty proceedings is vitiated. Accordingly, the levy of penalty was not justified. On the similar ground, ITAT Banglore Bench in the case of H Lakshminarayna vs ITO (2015) 41 ITR 465, deleted the penalty on the sole ground that the show cause notice was defective as it did not spell out specifically the ground on which the penalty was sought to be imposed. The ITAT Bangalore Bench further held that such d....
X X X X Extracts X X X X
X X X X Extracts X X X X
....T (Appellant) vs. M/s Amore Jewels P Ltd. (Respondent) Date of Order: 04/03/2016 that "The Explanation 1 to section 271(1)(c) raises rebuttable presumption and once the assessee has furnished all the evidences in support of its explanation and has substantiated his claim then the onus cost upon him is discharged and onus then shifts upon the AO to prove that such an explanation or evidence is false" In our case no such enquiry was made by the Learned Assessing Officer to prove that the explanation furnished by the assessee was false. Therefore the finding given in the above case are applicable. The finding given in last para of the order is reproducing herewith as under: - "All these evidences filed by the assessee has not been rebutted or disputed by the AO. It is a trite law that penalty proceedings are separate and distinct from the assessment proceedings and even if in the quantum proceedings, the matter has attained finality, however in the penalty proceedings, assessee may chose to rely upon the same material to prove that he has not guilty of furnishing of concealment of income. The Explanation 1 to section 271(1)(c) raises rebuttable presumption a....
X X X X Extracts X X X X
X X X X Extracts X X X X
....et of facts, we are of the view that the Explanation 1 to section 271 (1)(c) of the Act would come to the help of the assessee. Hence, on conspectus of the matter, we are of the view that the addition of cash credits confirmed by the ITAT, in the facts and circumstances of the instant case, would not necessitate levy of penalty under section 271(1)(c) of the Act, as the same, in our view, cannot be considered to be concealment of particulars of income. Accordingly, we set aside the order of the ld. CIT(A)on this issue and direct the AO to cancel the penalty levied on the cash credit addition." Therefore in the light of above observations the penalty deserves to be deleted. '' 4.3 On the other hand, the ld. DR relied on the orders of the Revenue authorities. 4.4 We have heard the rival contentions and perused the materials available on record. From the records, we noticed that while passing the order of penalty, the AO has not carried out any independent investigation and has merely relied upon the decision in quantum assessment proceedings. In this respect, the ld.AR of the submitted that at the time of assessment proceeding the assessee had supplied all the....