TaxTMI 
TaxTMI 
2020 (3) TMI 1173
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....1)(c) of the Income-tax Act, 1961 (hereinafter referred to as 'the Act'). The CIT(A) passed a composite order for all the assessment years. We shall take up the appeal of the assessee for the A.Y. 2000-01 first for reference to the facts and issues. Grounds raised by the assessee for this assessment year are extracted here as under : 1) On the facts and circumstances of the case and in law the CIT(A) erred in confirming the penalty levied u/s 271 (1)(c) by the AO though the notice initiating the penal proceedings being invalid inasmuch as the specific ground on which the penalty is initiated has not bean specified in such notice u/s 274 rws 271. 2) On the facts and circumstances of the case and in law the CIT(A) erred in confirming the ....
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....gs by mentioning that Issue notice u/s 271(1)(c) of the Act. (para 43 of the assessment order). 4. The CIT(A) confirmed the penalty as levied by the Assessing Officer. The contents of paras 5.6, 5.7 and 5.8 of the appellate order are relevant in this regard. 5. Aggrieved with the said decision of the CIT(A), the assessee is in appeal before the Tribunal with the above extracted grounds. 6. We perused the orders of the authorities below and find that this is a case where the Assessing Officer failed to record proper satisfaction while initiating and levying the penalty u/s 271(1)(c) of the Act. On perusal of paras 36, 36.a and 41 of the assessment order, we find the following are the reasons for initiation of penalty proceedings :- "36.....
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....as the judgment of Hon'ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory 359 ITR 565, we find the order of the CIT(A) should have to be set-aside on the legal issue. Hence, the penalty levied by the Assessing Officer is unsustainable in law and the same is wrongly upheld by the CIT(A). 10. The ld. DR for the Revenue heavily relied on the orders of the authorities below. 11. Considering the above, we are of the opinion that the legal requirement of making a clear cut reference to the applicable limb of clause (c) of section 271(1) of the Act, is not met by the Assessing Officer while initiating and levying the penalty u/s 271(1)(c) of the Act. Thus, the satisfaction of the Assessing Officer suffers from ....