TaxTMI 
TaxTMI 
2021 (6) TMI 932
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....s. 60,00,000/- for the year under consideration. The AO, vide assessment order dated 22.02.2013, held that no such deduction could be allowed without making provision for bad & doubtful debts in the account books of the previous year in which it was claimed, and, thereafter, quoting the case of State Bank of Patiala vs. CIT 272 ITR 54 (P&H), he restricted the deduction to Rs. 60,00,000/- and the balance amount was disallowed and added back to the income of the assessee. Penalty proceedings u/s 271(1)(c) of the Act were also initiated and notice u/s 274 dated 22.02.2013 was issued. 2.1 In response to notice issued u/s 274 of the Act, the assessee submitted before the AO that it had finalized its final accounts for the year by making provisions for bad debts as per the provisions of section 36(1)(viia) of the Act. However, at the time of finalization of computation of income due to misunderstanding by the authorized representative, extra deduction was claimed without looking into the contents of the provisions of bad debts provided in the balance sheet and a refund of pre-paid taxes was claimed. It was submitted that as the return of income was filed online, there was no need of s....
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....as settled law that the assessee should be made aware of the charge for which the penalty is being proposed to be imposed and a defect in the notice in the nature of the specific limb not being satisfied would vitiate the entire penalty proceedings. It was submitted that such a view has also now been upheld by the Hon'ble High Court of Delhi in the case of Sahara India Insurance Company Ltd vide order dated 02nd August 2019 in ITA 475/2019. The Ld. AR also drew our attention to page 3 of the penalty order wherein the AO has held that the assessee had furnished inaccurate particulars. It was submitted that the penalty ought to be deleted in view of the defect in the notice as aforesaid. The Ld. AR placed his reliance on numerous judicial precedents in support of his contention that the defect in notice would make the imposition of penalty unsustainable in law. 4.0 Per contra, the Ld. Sr. DR placed extensive reliance on the observations and findings of both the Lower Authorities. It was also pointed out that the ground relating to the defect in notice was not raised before the Ld CIT (A) and, therefore, the assessee should not be permitted to raise this ground at this junctu....
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.... order which would by a legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in....
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....y following the law as laid down by the Hon'ble High Court of Karnataka, as stated above, we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against it as to whether there is a concealment of income or furnishing of inaccurate particulars of income on its part, the penalty u/s 271(1)(c) of the Act is not sustainable. Recently, the Hon'ble Delhi High Court has approved the order of the Hon'ble Karnataka High Court in the case of Sahara India Life Insurance(supra). Accordingly, respectfully following the judicial precedents as aforementioned, we set aside the order of the Ld. First Appellate Authority and direct the AO delete the penalty. 6.0 In the final result, appeal filed by the assessee is allowed. Order pronounced on 31/05/2021. ============= Document 1 har To wife 1001 271 27 20 1.T.N.5-29. NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX CT, 1961 और शिकà¥à¤·à¤¾ समà¥à¤®à¤¾à¤¨ के लड़ीगरा मारà¥à¤—, कोट‌घर ....