2020 (1) TMI 1176

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....bai [hereinafter referred to as the "Ld- CIT(A)"] erred in passing the order dated 27.11-2018 upholding the penalty order passed by Ld, Assistant Commissioner of Income Tax, Circle - 19(2), Mumbai [hereinafter referred to as "Ld. A.O"] levying concealment penalty of Rs. 2,73,256/-without appreciating the facts and circumstances of the case. Thus, the order dated 27.11.2018 passed by Ld. CIT(A) is bad in law and the same may be quashed. 2. Notice issued under section 271(1)(c) of the Act without recording any satisfaction is bad in law I. The penalty notices dated 25.11.2011 and 20,03.2017 issued under section 274 r.w.s 271 of the Income Tax Act, 1961 [hereinafter referred to as "the Act"] is void ab initio as the same is n....

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.... nor furnished any inaccurate particulars of income. The Appellant, therefore, prays that levy of concealment penalty amounting to Rs. 2,73,256/- is unjustified and the same may be deleted. iii. The Ld. CIT(A) failed to appreciate that the Appellant has given bonafide explanation with respect to set off of business loss against salary income; which has not been found to be false. Thus, levy of concealment penalty amounting to Rs,2,73,256/- is unjustified and the same may be deleted. iv. Without prejudice to above, the excess of assessed income of Rs. 48,05,572/- over returned income of Rs. 43,90,290/- is Rs. 4,15,2907- only whereas the Ld. A.O . has levied penalty on assessed income of Rs. 8,34,324/- without considering th....

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.... Ld.CIT(A) was erred in confirmed penalty levied u/s 271(1)(c) without considering the fact the Ld. AO has not recorded any satisfaction before initiation of penalty proceedings u/s 271(1)(c), whether said penalty proceedings has been initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. The Ld. AR, further submitted that if, you go through the assessment order passed by the Ld. AO, it is very clear from the assessment order that the Ld. AO has not arrived at satisfaction before initiation of penalty proceedings , which is evident from the fact that the Ld. AO has merely stated that penalty proceedings u/s 271(1)(c) of the Act, are separately initiated . This lapse continued, even in notice i....

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....eard both the parties, perused the materials available on record and gone through orders of the authorities below. It is an admitted position of law that before initiation of penalty proceedings u/s 271(1)(c), the Ld. AO shall arrive at a clear satisfaction as to whether, such penalty proceedings are being initiated for concealment of particulars of income or for furnishing inaccurate particulars of income. If, the Ld. AO has not records clear satisfaction as required under the law, either in assessment proceedings or at the time of issuing show cause notice u/s 274 r.w. 271(1)(c), then the whole penalty proceedings, consequent to incorrect satisfaction or for non satisfaction becomes void ab-initio Further, it is also a settled position of....