TaxTMI 
TaxTMI 
TaxTMI 
2020 (10) TMI 78
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....f penalty for concealment of particulars of income and furnishins inaccurate particulars of income amounting to Rs. 24,00,000/- as per the provisions of Sec.271(l)(c) of the Act" 3. That without prejudice, even on merits also, under the facts and circumstances, no penalty u/s.271(l)(c) should had been levied, hence the impugned order levying penalty of Rs. 8,15,760/- @100% of the tax sought to be evaded needs to be quashed." 2. Facts of the case, in brief, are that the assessee is an individual and filed his return of income on 19th July 2014 declaring total income at Rs. 2,46,67,670/-. The AO completed the assessment determining the total income at Rs. 2,70,67,670/- wherein he made an edition of Rs. 24 lakhs treating the amount of Rs. 24 lakhs credited in the bank account of the assessee as income under section 69A as against agricultural income declared by the assessee. The assessee did not prefer any appeal against the said addition. Thereafter, the AO initiated penalty proceedings under section 271(1)(c) of the IT Act. Rejecting the various explanations given by the assessee and holding that the additional income disclosed by the assessee has come only after it was detected ....
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....ty of being heard in person or through authorized representative you may show cause in writing on or before that said date which will be considered before any such order is made under section 271(1)(c)." 6. Referring to the second show cause notice dated 2nd December 2017, he submitted that the AO has not .referred to the first show cause notice and, here also, there is no mention as to under which limb of the provisions of section 271(1)(c) the penalty has been initiated. Referring to para 8 of the assessment order, the ld. counsel drew the attention of the Bench to the operative para and submitted that here also the AO is not clear as to under which limb of the provisions of section 271(1)(c) of the Act the penalty is being initiated. Referring to the decision of the Hon'ble Delhi High Court in the case of PCIT vs Sahara Life Insurance Company Ltd., vide ITA 426/2019, order dated 2nd August 2019, he submitted that the Hon'ble High Court in the decision has upheld the order of the Tribunal quashing the penalty proceedings on the ground that notice issued by the AO would be bad in law if it did not specify under which limit of section 271(1)(c) the penalty proceedings have been in....
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....ssued under section 274 read with section 271(1)(c) of the Act is concerned, i.e., under which limb the AO has initiated penalty proceedings, the ld. DR, referring to the decision of the Hon'ble Supreme Court in the case of MAK Data Private Limited vs CIT, reported in 358 ITR 593, drew the attention of the Bench to Para 10 of the order which reads as under:- "10. The AO has to satisfy whether the penalty proceedings be initiated or not during the course of the assessment proceedings and the AO is not required to record his satisfaction in a particular manner or reduce it into writing. The scope of Section 271(l)(c) has also been elaborately discussed by this Court in Union of India vs. Dharmendra Textile Processors (2008) 13 SCCO 369 and CIT vs. Atul Mohan Bindal (2009) 9 SCC 589." 9. He submitted that as per the above decision, the AO is not required to record his satisfaction in a particular manner or reduce it into writing. Therefore, the argument of the ld. counsel for the assessee should be rejected and there is no infirmity in the assessment and penalty order of the AO as well as in the notice issued while initiating penalty proceedings. 10. So far as the merit of the ca....
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.... income or for furnishing inaccurate particulars of income. We find identical issue had come up before the Hon'ble Delhi High Court in the case of PCIT vs M/s Sahara India Life Insurance Company Limited. We find the Hon'ble High Court vide ITA 426/2019, order dated 2nd August 2019 at para 21 of the order has observed as under:- "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1) (c) of the Act. which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016." 14. Similarly, we find the co-ordi....
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....of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the ITA No. 4913/Del/2015 decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VSMANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." Thus, Additional Ground No. (ii) of the assessee's appeal is allowed. Since the inception of the notice issued u/s 271(1)(c) has become null and void, there is no need to comment on merit of the case. The Penalty u/s 271(1)(c) of the Act is quashed." 16. Since in the instant case also the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered ....