2022 (1) TMI 231

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...., in brief, are that the assessee is a company engaged in the business of acquiring agricultural land and converting the same into land use, plotting the same into residential and commercial by giving various offers and advertisements in the newspapers. It filed its return of income on 19th January, 2016 declaring the loss of Rs. 2,07,08,859/-. The case of the assessee was selected for scrutiny through CASS. In response to the statutory notices issued by the AO, the AR of the assessee appeared from time to time and filed the requisite documents. The AO completed the assessment u/s. 143(3) of the Act determining the total income of the assessee at Rs. 14,38,690/- wherein he made the following additions:- i) Disallowance out of advertiseme....

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....k Account in which this Intt. Is credited in next year could not be concealed, it being in the Balance Sheet & knowledge of Department. Dismissal of appeal by CIT(A) is arbitrary, without application of mind & bad in Law even thought complete facts were duly brought to knowledge of CIT(A) (which was not new evidence) and the Ld. CIT(A) should bad decided appeal on fact though non furnishing of reply to the A.O. could be due to its counsel, staff, etc. It is prayed that penalty levied may be cancelled." 5. The ld. Counsel for the assessee, at the outset, drew the attention of the Bench to the copy of the notice issued u/s. 274 r.w.s. 271 of the Act dated 29th December, 2016 and submitted that the AO has not struck off th....

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....mely, unexplained investment of Rs. 33,41,000/- and undeclared interest income of Rs. 1,83,020/-. I find, the ld. CIT(A) sustained the penalty levied by the AO on the ground that the assessee failed to offer any explanation in respect of investment in property during the assessment and penalty proceedings and also could not give the reasons for not showing the interest income. It is the submission of the ld. Counsel for the assessee that the entries relating to investment in property are already recorded in the books of account. So far as the interest on FD is concerned, it is his submission that due to non-intimation by the bank regarding the accrual of interest and in absence of any TDS on such interest income, the assessee was not aware ....

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....in the notice issued u/s. 274 r.w.s. 271 of the Act dated 29th December, 2016 and the notice does not indicate the proper charge, i.e., under which limb of section 271(1)(c) of the I.T. Act the penalty proceedings have been initiated, therefore, respectfully following the decision of the Hon'ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Company Ltd. (supra), I hold that the penalty proceedings are not in accordance with the law. The penalty levied by the AO and confirmed by the CIT(A) is accordingly directed to be deleted. 11. In the result, the appeal filed by the assessee is allowed. The decision was pronounced in the open court on 23.12.2021. ============= Document 1 I.T.N.S.-29 आय....