2021 (3) TMI 1042

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.... to be engaged in deriving income from trading of shares. Assessee filed its return of income for A.Y. 2012-13 on 21.09.2012 declaring loss of Rs. 2,31,43,190/-. The case was selected for scrutiny and thereafter, assessment was framed u/s 143(3) of the Act vide order dated 20.03.2015 and the loss claimed by the assessee was disallowed by the AO for the reasons that the assessee could not substantial the claim of loss. On the aforesaid disallowance of loss, penalty of Rs. 69,43,000/- was levied by the AO vide order dated 24.09.2015 u/s 271(1)(c) of the Act. 4. Aggrieved by the order of AO, assessee carried the matter before the CIT(A) who vide order dated 06.12.2016 in Appeal No.270/2015-16/GZB dismissed the appeal of the assessee. Aggrie....

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....t considering the reasons given by assessee and further erred in refusing to consider the merits by conducting enquiry etc. Therefore, it is prayed that penalty of Rs. 69.63 lakhs sustained may kindly be quashed." 5. Before us, Assessee is challenging the levy of penalty u/s 271(1)(c) of the Act. Before us, Learned AR submitted that in the assessment order no specific charge has been recorded by the AO as to whether it was the case of concealment of income or the case was of furnishing of inaccurate particulars of income but on the contrary has recorded it to be concealment of income and/or furnishing of inaccurate particulars of income. He thereafter pointed to the copy of the notice issued u/s 274 r.w.s 271(1)(c) dated 20.03.2....

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....e particulars of income or a case of concealment of the particulars of income has been indicated. It is a settled law that while levying penalty for concealment, the AO has to record satisfaction and thereafter come to a finding in respect of one of the limbs, which is specified under section 271(1)(c) of the Act. The first step is to record satisfaction while completing the assessment as to whether the assessee had concealed its income or furnished inaccurate particulars of income. Thereafter, notice u/s 274 read with Section 271(1)(c) of the Act is to be issued to the assessee. The Assessing Officer thereafter has to levy penalty under Section 271(1)(c) of the Act for non-satisfaction of either of the limbs. While completing the assessmen....