2022 (9) TMI 27

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....(1)(c) of the Income Tax Act, 1961 (hereinafter referred as 'the Act') by the Ld. AO, ITO, Ward-3(2), New Delhi (hereinafter referred as the Ld. AO). 2. The appellant company had filed return of income on 30.09.2012 declaring gross total income of Rs. Nil and the case was selected for scrutiny. An assessment order u/s. 144 of the Act was passed making an ad hoc addition of Rs. 2 crores. In appeal before Ld. CIT(A), the same was reduced to Rs. 46,46,217/- while deleting Rs. 1,53,53,783/-. Thereafter, vide penalty order dated 28.02.2018, the Ld. AO had imposed penalty of Rs. 14,35,681/- @ 100% of the tax sought to be evaded u/s. 271(1)(c) of the Act and the same was sustained by the Ld. CIT(A) by impugned order dated 11.09.2018. ....

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....to Rs. 46,46,217/-, by just using the three (3) different tools, confirmed the rejection of books of accounts and accordingly re-estimation of the Income has been made. 3. That the learned CIT (Appeals) has erred both in law and on facts by confirming the penalty order passed by the AO under section 271(1)(c) without appreciating the fact that Learned CIT (Appeal) while passing the order, against the quantum of appeal, estimation of income has been made, by using the three (3) different tools as under: a. Estimation of income due to negative cash Rs. 27,52,695/- b. Estimation of expenses incurred while cash was negative Rs. 4,00,000/- c. Estimation of income due to reduction of GP Ration From 8.84% to 7.3....

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....ng the matter in record and the submissions, it can be observed that there is no dispute to the fact that the notice u/s. 274 read with section 271 of the Act dated 27.03.2015, did not categorically specify if the penalty proceeding u/s. 271(1)(c) have been initiated on finding of concealment of particulars of income or furnishing inaccurate particulars of such income. It can be further appreciated that in the assessment order dated 27.03.2015 the Ld. AO had though observed that there is concealment of income and accordingly Assessee company is liable for penalty proceeding u/s. 271(1)(c) of the Act. However, when the notice was issued on 27.03.2015 there was no specific indication of the limb of the default. Further during the penalty proc....