2021 (3) TMI 1065

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....sentative of both the parties and perused the material available on record. 3. Learned Counsel for the Assessee at the outset submitted that the A.O. issued show cause notice Dated 10.12.2010 under section 271 read with section 274 of the I.T. Act, 1961 before levy of the penalty in which the A.O. has mentioned as under : "Have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of Explanation 1, 2, 3, 4 and 5." 3.1. He has, therefore submitted that the A.O. has not mentioned as to for which limb of Section 271(1)(c) of the I.T. Act, 1961 the penalty proceedings have been initiated i.e., whether for concealment of particulars of income or for furnishing inaccurate particulars o....

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.... The A.O. noted that provision for bad debt of Rs. 1,01,81,411/- was debited to P & L account. The A.O. noted that such provision is not allowable unless it is ascertained liability. The A.O. accordingly made addition of the amount and assessed the net loss at Rs. 4.74 crores. The A.O. on the aforesaid addition levied the penalty under section 271(1)(c) of the I.T. Act, 1961. The Ld. CIT(A) dismissed the appeal of assessee. 3. Learned Counsel for the Assessee referred to the chart to show that assessee has been suffering loss continuously. Learned Counsel for the Assessee referred to several replies filed with the Income Tax Authorities as well as to the concerned Department of the Government of India for release of the amount in q....

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....or concealment of particulars of income or furnishing inaccurate particulars of income, as rightly pointed-out by the Learned Counsel for the Assessee. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself similar view is taken by Hon'ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows 73 taxmann.com 241. This decision is confirmed by the Hon'ble Supreme Court reported in 73 taxmann.com 248. In this view of the matter, the orders of the authorities below are set aside and penalty is cancelled. 5. In the result, appeal of assessee is allowed." 3.2. He has further submitted that Hon'ble Delhi High Court also in the case of Pr. CIT vs., M/s. Sahara In....