2020 (11) TMI 929

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....1)(c) of the Income Tax Act, 1961 (hereinafter called 'the Act,). 2.0 The brief facts of the case are that the assessee company is engaged in the business of Real Estate. The return of income was filed declaring an income at Rs. Nil and the assessment was completed at an income of Rs. 50,19,200/- after making an addition of Rs. 50 lacs u/s 68 of the Act and Rs. 19,200/- u/s 14A of the Act. The addition of Rs. 50 lacs was on account of receipt on share application money which, as per the Assessing Officer, could not be substantiated. The assessee's appeal against the quantum addition was upheld both by the Ld. CIT (A) as well as this Tribunal. The impugned penalty of Rs. 15,45,000/- was imposed by the Assessing Officer vide order dated....

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....AO has relied on authorities justifying deemed concealment whereas the penalty proceedings were initiated not for concealment but for a different default of furnishing of inaccurate particulars of income. 5. The impugned order of penalty is not sustainable as the addition u/s68 does not offer ground to the AO to consider the additional income as concealed income. 6. The appellant craves leave to add, delete, modify / amend the above grounds of appeal with the permission of the Hon'ble appellate authority." 3.0 The Ld. Authorised Representative submitted that there has been inconsistency in the approach of the Assessing Officer (AO) while imposing the penalty. It was submitted that in page-4 of the assessment order, the ....

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....fend its case prior to the imposition of penalty. It was further submitted by the Ld. DR that the Tribunal has upheld the quantum addition and, therefore, it was a fit case for imposition of penalty. It was also argued that furnishing of inaccurate particulars leads to concealment of income. The Ld. Sr. DR relied on numerous case laws to buttress her argument that the penalty had been rightly imposed. The Ld. Sr. DR specifically relied on the judgment of Hon'ble Madras High Court in the case of Sundaram Finance Limited vs. ACIT reported in 403 ITR 407 (Madras) for the proposition that if the assessee has understood the purport and import of notice, no prejudice is caused by not striking off of the irrelevant limb in the penalty notice. T....

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....hing inaccurate particulars of income. Thus, apparently the assessee was not made aware of the charge for which the penalty was being proposed to be imposed and was finally imposed. This issue is no longer res-integra and the issue has to be decided in favour of the assesse in light of the judgment of the Hon'ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton & Ginning Factory reported in 359 ITR 565 (Karn-HC) wherein it has been held that the notice issued by the Assessing Officer would be bad in law, if it did not specify under which limb of Sec. 271(1) (c) the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing inaccurate particulars of income. Further, the Hon'ble....