2023 (4) TMI 1404

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.... of natural justice. 3. The learned Commissioner of Income Tax (Appeals) has erred in law and in facts in confirming penalty u/s 271(1)(C) of the Act at Rs. 2,50,000/- 4. The appellant craves leave to add to, alter, amend and / or delete in all the foregoing grounds of appeal." 2. Briefly stated facts necessary for consideration and adjudication of the issues at hand are : on the basis of completed assessment framed under section 143(3) read with 153C of the Income Tax Act, 1961 (for short 'the Act') determining the total income at Rs. 4,63,769/- by making addition of the commission income @ 0.15% in case of assessee being an entry provider, penalty proceedings were initiated by way of issuance of notice under section 274 read with section 271 of the Act. 3. Declining the contentions raised by the assessee that very initiation of penalty proceedings were bad in law as valid notice has not been issued to the assessee, the Assessing Officer (AO) reached the conclusion that the assessee has concealed correct nature/particulars of its income and thereby levied the penalty of Rs. 6,49,788/- @ 100% of the tax on the income sought to be evaded under ....

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....f issuing the notice was not satisfied if he was initiating the penalty against the assessee for concealing particulars of his income or for furnishing inaccurate particulars of such income. 11. This issue has been decided by the Hon'ble Bombay High Court in Full Bench Judgment rendered in case of Md. Farhan A Sheikh vs. ACIT (2021) 434 ITR 1(FB-Bombay) and held that penalty under section 271(1)(c) of the Act is not leviable when invalid notice as in the instant case has been issued to the assessee. The operative part of the order passed by the Hon'ble Bombay High Court is as under: "180. One course of before us is curing a defect in the notice by referring to the assessment order, which may or not contain reason for the penalty proceedings. The other course of action is the prevention of defect in the notice - and that 7. Sailesh Mehta v. CIT (A) ITA No. 2445, 2439, 2444 &2443/Mum/2021 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 penalty on one or the other, or both grounds mentioned in Sec. 271(1)(c), do....

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....modified by the appellate authority the AO cannot proceed with the penalty proceedings as has been held by the Hon'ble Delhi High Court in case of Pr. CIT vs. Fortune Technocomps (P) Ltd. (ITA No. 313/2016) (Delhi HC) by following the decision rendered by the Hon'ble Kolkata High Court in case of CIT vs. Ananda Bazar Patrika Pvt. Ltd. (1979) 116 ITR 416 (Cal HC) by returning the following findings: "Wherein the Hon'ble Calcutta HC affirmed the view of the ITAT that "once the basis for initiation of penalty proceedings was altered or modified by the first appellate authority, the then Learned Assessing Officer has no jurisdiction thereafter to proceed on the basis of the findings of the first appellate authority." 15. So we are of the considered view that when entire addition in this case is on estimation basis and at no point of time Revenue Authorities have reached the specific conclusion that the assessee has concealed the particulars of income or has furnished inaccurate particulars of income rather made the addition on the basis of information received from Sales Tax Department without conducting any independent enquiry as to the alleged bogus purchases, th....

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.... अधिनियम, 1922 की 22 (1) 22(2)/34 के अधीन दी गई सूचना के अनुसार देनी थी या जो आपको धारा 139 (1) के अधीन या आयकर अधिनियम, 1961 को धारा 139 (2)/148 के अधीन दी गई सूचना अनुसार दाखिल करनी थी अथवा उचित कारण के बिना आपने दिए गए समय के अन्दर और उक्त धारा 139 (1) या इस प्रकार की सूचनà....

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.... - को अ.म./पू.म. में आप मेरे कार्यालय में उपस्थित हों और कारण बताएं कि आयकर अधिनियम, 1961 की धारा 271 के अधीन आप पर दण्ड लगाने का आदेश क्यों न दिया जाए। यदि आप स्वयं उपस्थित होकर या प्राधिकृत प्रतिनिधि द्वारा सुनवाई के लिए दिए गए अवसर का लाभ नà¤....