2022 (4) TMI 18

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.... : "(1) The Ld. CIT has erred in law and on facts in upholding order of Ld. A.O. of levy of penalty when there was no specific charge at the time of initiation of penalty. (2) The Ld CIT(A) has erred in law and on facts in upholding the order of penalty u/s 271(1)(c) of Act of Rs. 2,48,312/-. (3) The appellant craves liberty to add, amend, alter or modify all or any grounds of appeal before final appeal." 3. The assessee is an individual and filed return of income for the A.Y. 2014-15 on 29.11.2014 declaring total income of Rs. 5,92,662/-. The Assessing Officer observed that during the course of assessment, on verification of purchase and sales registers furnished by the assessee for the year under assessment, ....

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....ady offered profit at 1.1% in his return of income the difference of 0.65% was treated as income of the assessee. Thus, the CIT(A) held that there is no addition on estimate basis and the addition was made treating the particular sales and purchases as bogus. Thus, the CIT(A) confirmed the penalty. 5. The Ld. AR submitted that there is no specific charge mentioned in the assessment order as well as in the notice under Section 271(1)(c) read with 274 of the Act. The Ld. AR further submitted that without giving specific charge, imposition of penalty is not valid. On merit, the Ld. AR submitted that the addition was made purely on estimate basis and the objection of the CIT(A) that the assessee has offered profit at 1.1% in his return of in....

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....t, the Assessing Officer has simply made observation in para 7 of the penalty order that the assessee evaded the income details and thereby concealed the particulars of income or furnished inaccurate particulars. But the intention of the provision of Section 271(1)(c) has given a mechanism as to on which specific limb penalty has to be levied. If the assessee furnished inaccurate particulars then the penalty proceedings will be separate and the reasoning will be separate to that extent. If the assessee has concealed the particulars of income, the reasoning has to be given by the Assessing Officer to that extent. If both the limbs has been observed or identified in any particular assessee's case then for both the limbs the Assessing Officer ....