2023 (1) TMI 1214

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....he mind of AO about which limb penalty is to be levied. 2. The brief facts of the case are that the assessee is a Non Banking Financial Company (NBFC), the assessee's assessment was completed u/s 143 (3) of the Act on 30.03.1999 determining the total income of Rs. 5,38,37,341/ as against the return of loss of Rs. 5,58,08,961/- and the disputed issue was in respect of claim of depreciation of Rs.10,53,37,341/- on various assets leased to different parties was disallowed as the leases were mere financial transactions and lease simplicitor. Against the order, the assessee has filed an appeal before the CIT(A), whereas the CIT(A) has confirmed the action of the A.O. On further appeal, before Hon'ble Tribunal in ITA No. 2287/Mum/2001 dated 10.0....

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....assessee has filed the detailed explanations referred at Page 3 Para 13 of the order. The AO has considered findings of scrutiny assessment, submissions, facts of claim of depreciation disallowed and was not satisfied with the explanations dealt in the penalty order and levied a penalty of Rs.40,45,088/- and passed the order u/s 271(1)(c) of the Act dated 26-12-2018. 4. Aggrieved by the penalty order, the assessee has filed an appeal before the CIT(A). In the appellate proceedings, the assesse has raised additional ground of appeal on the validity of penalty notice. Whereas, the CIT(A) has confirmed the penalty levied by the A.O and dismissed the appeal. Aggrieved by the CIT(A) order, the assessee has filed an appeal before the Hon'ble Tri....

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....nalty proceedings. The other course of action is the prevention of defect in the notice - and that prevention takes just a tick mark. Prudence demands prevention is better than cure. Answers: Question No. 1: If the assessment order clearly records satisfaction for imposing penal ty on one or the other, or both grounds mentioned in Sec. 271(1)(c), does a mere defect in the notice - not striking off the irrelevant matter vitiate the penal ty proceedings? 181. It does. The primary burden lies on the Revenue. In the assessment proceedings, it forms an opinion, prima facie or otherwise, to launch penal ty proceedings against the assessee. But that translates into action only through the statutory notice under Sec. 271(1)(c), r.w.s. 274 of ....