2019 (12) TMI 773

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....V.)   RESPONDENTS (BY SRI JEEVAN J. NEERALGI, ADV.)   O R D E R Heard the learned counsel for the respective parties. 2. The petitioner has assailed the order dated 22.05.2019 passed by the respondent No.1 whereby the petitioner's application for stay of the demand pursuant to the order dated 23.04.2019 passed by the respondent No.1 under Section 271(1)(c) of the Income Tax A....

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....tioner is a company engaged, inter alia, in the business of rendering software service. The return of income was selected for scrutiny and the 1st respondent passed a draft assessment order under Section 143(3) r/w Section 144-C of the Act proposing to make disallowance under Section 14-A of the Act and recomputed the deduction claimed under Sections 10-A and 10-AA of the Act. Aggrieved, the petit....

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....ing the original order to re-adjudicate the disallowance made under Section 14-A of the Act and the re-computation of deduction under Sections 10-A and 10-AA of the Act which indeed was the basis for the levy of penalty.   4. The representations made by the petitioner requesting to cancel the levy of penalty pursuant to the order passed in M.P.No.38/Bang/2019 by the Tribunal came to be rej....

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....etails for the levy of penalty and the same is not in conformity with the decision of the Division Bench of this Court in Commissioner of Income Tax Vs. Manjunatha Cotton & Ginning Factory reported in (2013) 35 taxmann.com 250 (Karnataka). In such circumstances, penalty proceedings initiated by the Assessing Officer is bad in law. 6. Learned counsel for the respondent-Revenue supports the order....