TaxTMI 
TaxTMI 
2022 (3) TMI 78
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....006-07. 2. Brief facts of the case as culled out from the material on record are as under:- The assessee is a company stated to be engaged in the business of manufacturing of furniture. Assessee filed its return of income for assessment year 2006-07 on 28.11.2006 declaring total income of Rs. 25,87,136/-. The case was selected for scrutiny and thereafter assessment was framed under Section 143(3) of the Income Tax Act, 1961 (the Act) vide order dated 26.12.2008 and the total taxable income was determined at Rs. 2,36,42,637/- inter alia by making the following disallowances:- 1. Trading Account 50,00,000/- 2. Foreign Travel 16,15,413/- 3. Interest capitalized in WIP 17,24,325/- 4. Depreciation on building 5,28,425/- 5. Intere....
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....enalty on the various additions. However, she submitted that in the penalty order passed by the Assessing Officer no satisfaction has been recorded by the Assessing Officer with respect to the disallowance of Rs. 16,15,413/- made on account of travel expenses. She submitted that Assessing Officer has not stated as to whether on the addition of disallowance of travel expenses on which the penalty has been levied was a case of furnishing of inaccurate particulars of income or was a case of concealment of income. In support of her contention she pointed to the order of the AO and submitted that there is no mention in the AO's order about the levy of penalty on the disallowance of travelling expenses. On the merits she submitted that during the....
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....gs under the Act is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct such person shall pay by way of penalty, in addition to the tax payable by him, a sum which shall not be less than but which shall not exceed three times the amount of tax sought to be evaded by reason of concealment of particulars of his income or furnishing of inaccurate particulars of such income. Thus the two key expressions which comprises of two limbs for imposition of penalty u/s 271(1)(c) of the Act are "concealment of particulars of his income" & "furnishing inaccurate particulars of such income". It is a settled law that while levying penalty for concealment, the AO has to reco....
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.... Courts have held that AO must indicate in the notice for which of the two limbs he proposes to impose the penalty and for this the notice has to be appropriately marked. If in a printed format of the notice the inapplicable portion is not struck off thus not indicating for which limb the penalty is proposed to be imposed, it would lead to an inference as to non application of mind, thus vitiating imposition of penalty. 10. We find that Hon'ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. (2021) 432 ITR 84 (Del), after considering the decision in the case of CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Kar) & CIT vs. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) [where the SLP file....