TaxTMI 
TaxTMI 
TaxTMI 
2021 (9) TMI 1136
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....passed is also illegal and bad in law. 3. That on the facts and circumstances of the case and the provision of the law, the Ld. CIT(A) has erred in sustaining penalty of Rs. 16,41,194/- under section 271(1)(c) of the Income Tax Act, 1961. 3. Ground no.1 and 2 are regarding the validity of the initiation of penalty proceedings for want of specific charge in the show-cause notice as well as in the penalty order. 4. The Ld. AR of the assessee has submitted that the Assessing Officer while issuing the show-cause notice has not specified whether the penalty is proposed to be levy for furnishing of inaccurate particulars of income or for concealment of particulars of income. He has referred to showcause notice issued by the Assessing Officer dated 30.03.2016 and submitted that the Assessing Officer has not specified the charge for which the penalty was proposed to be levied. The AR has further submitted that even the penalty was imposed by the Assessing Officer while passing the order u/s 271(1)(c) of the Act for both the charges i.e. furnishing of inaccurate particulars of income or concealment of income. Thus, the Assessing Officer was not certain even at the time of levying the ....
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....d and liable to be quashed. He has referred to the decision of the Hon'ble Karnataka High Court in the case of CIT vs Manjunatha Cotton & Ginning Factory, reported in 359 ITR 565 (Karn.) as well as the decision of the Hon'ble Supreme Court I the case of CIT vs M/s SSA's Emerald Meadows reported in 242 taxman 180 (SC). 5. On the other hand, Ld. CIT-DR has submitted that the Assessing Officer has initiated penalty on definite charge. He has referred to the assessment order and submitted that the Assessing Officer has made two additions while framing the assessment and initiated the penalty proceedings u/s 271(1)(c) of the Act for each addition for specific charge of concealment. In support of his contention he has referred to para 11 and 12 of the assessment order. He has further submitted that the Ld. CIT(A) has confirmed the penalty levied u/s 271(1)(c) of the Act by holding that the assessee has concealed the particulars of its income. He has referred to para 5.3 of the Ld. CIT(A) and submitted that the once the order of the Assessing Officer passed u/s 271(1)(c) is merged with the order of the Ld. CIT(A), then the finding of the Ld. CIT(A) holding that the assessee has concealed....
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....ticulars of income would render the initiation of the penalty proceedings as well as the levy of penalty u/s 271(1)(c) of the Act is invalid and consequential order passed u/s 271(1)(c) of the Act is liable to be quashed. It is a settled proposition of law that if the penalty is initiated on one limb i.e. concealment of particulars of income or furnishing of inaccurate particulars of income and the finding in the penalty order for levying the penalty on the other limb is also bad in law. Therefore, the Assessing Officer has to give a definite finding about the default/guilty of the assessee attracting the penalty u/s 271(1)(c) of the Act while passing the penalty order. 8. In the case, in hand, the assessee filed the return of income on 28.09.2013 declaring total income of Rs. 48,66,590/-. Thereafter, a survey operation u/s 133A of the Act was carried out at the business premises of the assessee on 19.12.2013 by the Investigation Wing-1(1) of the Department. A survey was also conducted in case of 3 other companies of this group including the assessee company. During the post survey proceedings, the assessee in its statement dated 27.12.2013 surrendered an income of Rs. 50 Lakhs fo....
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....on is made by the Assessing Officer on the basis of statement of the assessee recorded in post survey enquiry. Therefore, the addition was made on the basis of the surrendered made by the assessee and hence this addition and the nature of the addition was very much known to the assessee right from the time when the assessee surrendered this amount in the statement recorded during the post search enquiry. Therefore, this addition does not fall in the category where the Assessing Officer has made addition based on some enquiry or his decision but this addition was made on the basis of surrendered made by the assessee. Accordingly, the default and the charge for which the penalty was proposed to be levied was very much in the knowledge of the assessee being the surrendered made by the assessee. Further, the Assessing Officer has very much recorded the satisfaction in the assessment order and stated that the penalty proceedings u/s 271(1)(c) of the Act are initiated as the assessee has concealed the particulars of income. Therefore, to the extent of initiating penalty proceedings as well as levy of penalty proceedings u/s 271(1)(c) of the Act against addition of Rs. 50 Lakhs based on t....
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.... assessee has surrendered the income after persistent queries by the Assessing Officer, the explanation of the assessee that he has declared income to buy peace of mind and to come out of waxed litigation could be treated as bona-fide and penalty levied u/s 271(1)(c) of the Act is not justified. The Ld. AR has thus submitted that the surrender was made by the assessee just to buy peace of mind and to avoid the litigation, the same would not attract the penalty proceedings u/s 271(1)(c) of the Act. 13. On the other hand, the Ld. DR has relied upon the orders of the authorities below and submitted that but for the survey proceedings, the assessee would not have surrendered this income of Rs. 50 Lakhs for the year under consideration. Therefore, it is not voluntarily surrender made by the assessee but the surrender was made because of the enquiry conducted by the Investigation Wing during survey proceedings. 14. We have considered the rival submission as well as the material available on record. The assessee has not disputed the fact that a survey was conducted post filing of return of income and during the enquiry conducted by the Investigation Wing, the assessee surrendered the in....