2022 (4) TMI 33

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....for assessment year 2014-15 on 15.10.2015, declaring total income of Rs. 1,99,940. The case was selected for scrutiny and thereafter assessment was framed under Section 143(3) of the Income-Tax Act, 1961 vide order dated 26.12.2016 at a total income of Rs. 22,19,940, inter alia, by making an addition of Rs. 20,20,000 on account of unexplained cash deposits. On the aforesaid addition of unexplained cash deposits, Assessing Officer vide penalty order passed under Section 271(1)(c) of the Income-Tax Act, 1961 dated 29.06.2017 levied penalty of Rs. 5,10,861 under Section 271(1)(c) of the Act'. 3. Aggrieved with the order of the Assessing Officer, assessee carried the matter in appeal ( Appeal No. 10070/17-18 ) before the learned Commissioner....

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....r furnished inaccurate particulars. 4. On facts and circumstances of the case, the learned Commissioner of Income-Tax(Appeals) erred in law and on facts in upholding penalty, notwithstanding that the Appellant had agreed to additions on the specific understanding that penalty would not be levied u/s 271(1)(c) of the Income-Tax Act by the learned AO. 5. On facts and circumstances of the case, the learned Commissioner of Income-Tax(Appeals) erred in upholding penalty of Rs. 5,10,861 levied u/s 271(1)(c) of the Income-Tax Act. 6. The Appellant craves to leave, add, amend, modify, delete and/or change all or any of the grounds on/or before the date of hearing." 5. Before us, at the outset, at the time of hearing, l....

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....ct is imposable and in support of her contention, she placed reliance on the decision of Hon'ble Delhi High Court in the case of Sahara India Life Insurance Co. Ltd. reported in (2021) 432 ITR 84 (Del.) and other decisions. 7. Learned Departmental Representative on the other hand supported the orders of lower authorities & submitted that the assessment order & penalty order have to be seen together & not in isolation. 8. We have heard the rival submissions & and perused the material on record. The issue in the present appeal is with respect to the upholding of levy of penalty u/s. 271(1)(c) of the Act by learned Commissioner of Income-Tax(Appeals). The Assessing Officer has levied penalty u/s. 271(1)(c) of the Act on the additions....

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....alty u/s. 271(1)(c) of the Act for non-satisfaction of either of the limbs which gets attracted. Thereafter, notice u/s. 274 r.w.s. 271(1)(c) of the Act is to be issued to the assessee. The aforesaid notice should specifically indicate on which ground penalty is sought to be imposed, whether for concealment of income or for furnishing inaccurate particulars of income. In the present case, the perusal of assessment order passed by the Assessing Officer reveals that in the Assessment Order, no specific finding has been recorded by the Assessing Officer as to whether it is a case of concealment of income or a case of furnishing of inaccurate particulars of income. Further in the notice dated 26.12.2016, issued under Section 274 read with Secti....

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....le High Court in the case of Sahara India Life Insurance Co. Ltd. (supra) read as under: "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted b y the ITAT. It followed the decision of the Karnataka High Court in CIT vs. Manjunatha Cotton & Ginning Factory 359 565 (Kar) and observed that the notice issued by the Assessing Officer would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in CIT vs. SSA's Emeral....