TaxTMI 
TaxTMI 
2023 (4) TMI 240
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....of the case and in law, Commissioner of Income Tax (Appeals)-I, New Delhi ['the CIT(A)] has erred in upholding levy of penalty of Rs.2,30,58,990/- under section 271(1)(C) of Income tax Act, 1961 ('the Act'). 2. That on facts and circumstances of the case and in law, the CIT(A) has erred in upholding the levy of penalty u/s 271(1)(C), even though the show cause notice us 274 of the Act did not specify whether the penalty is sought to be levied on the charge of "concealment of income" or "furnishing of inaccurate particulars of income". 3. That on facts and circumstances of the case and in law, the CIT(A) has erred in holding that the Appellant has furnished inaccurate particulars of income to the extent of Rs.6,....
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.... particulars of income to the extent of Rs.3,91,714/- (68,29,057 - 65,09,343). 6. That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that the Appellant has discharged the onus that lay upon it in terms of Explanation 1 to section 271(1)(C) of the Act". 3. Brief facts of the case leading to levy of penalty in this case are as under:- "In the present case, the AO has passed the penalty order under section 271(1)(C) imposing penalty of Rs.2,30,58,990/- for AY 2007-08. In the assessment order the total income was computed at Rs. 189,91,98,857/-, against the declared income of Rs.170,55,22,175/-, In the assessment order, the AO has made the following additions: (I) addition of prior period ....
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....) deduction under section 801B(10) was restricted toRs.3, 19,714/-." 4. On the aforesaid addition, penalty of Rs.2,30,58,990/- was imposed, which was confirmed by the Ld. CIT(A). 5. Against this order, the assessee is in appeal before us. 6. We have heard both the parties and perused the records. The Ld. Counsel for the assessee summarized in brief his pleadings, which reads as under:- "Dispute - Penalty imposed u/s 271(1) (C) amounting to Rs.2,30,58,990/- in respect of following disallowance. Disallowance of expenditure in connection with QIP Rs.6,75,20,806/- Disallowance of claim of deduction u/s 80IB on the ground of allocation of interest expenses Rs.3,19,714/- Total Rs.6,78,40,520/- The asse....
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....T Page 26 - 34, Para 23-30] Date of assessment order: 08/12/2009 Date of CIT(A) order : 30/09/2010 Date of ITAT order : 17/08/2017 SUBMISSIONS 1. Ground No.2 is regarding non-striking off of irrelevant part in the notice u/s 274 rws 271(1)(C). The assessing officer has failed to record proper satisfaction in the notice us 274 dated 08/12/2009 * Pr.CIT v. Sahara India Life Insurance Co. Ltd. [2021] 432 IT 84 (Delhi) * CIT v. SSA's Emerald Meadows [2016] 242 Taxman 180 (SC) * CIT v. Manjunatha Cotton & Ginning Factory [2013] 359 IT 565 (Kar) * Orient Clothing Company P. Ltd. v. ACIT (ITAT Delhi) (ITA No. 8931/D/19) (05/01/23) (NK Choudhry and Shamim) 2. Primary disput....
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....ital purposes are to be allowed as revenue expenses. As the issue is debatable and not free from doubt, there could be no case of penalty u/s 271(1)(C)." 7. Per Contra, the Ld. DR relied upon the orders of the authorities below. 8. Upon careful consideration, first we address the assessee's claim regarding jurisdictional defect in as much as in ground no.2, the assessee has stated that there is no striking off of irrelevant part in the notice u/s 274 rws 271(1)(C). Copy of the notice 274 is attached in paper book at page 2. It is evident that the same is an omnibus notice without identifying the charge by striking off of the limb which is not applicable. In such circumstances, the penalty levied cannot be sustained. For this ....