TaxTMI 
TaxTMI 
2025 (6) TMI 1907
X X X X Extracts X X X X
X X X X Extracts X X X X
.... assumption of the jurisdiction by the AO for levy of penalty u/s 271(1)(c) was initiated by the assessment order, where there is no specific charge, i.e. either for concealment of income or for furnishing of inaccurate particulars of income have been mentioned, qua this, assessee has raised the said issue vide Ground No. 4, which reads as under:-. "4. Notwithstanding the above said ground of appeals, the levy of penalty u/s 271(1) (c) is unjustified, since no specific charge, either for concealment of income or for furnishing inaccurate particulars of income have been made while passing the order u/s 143(3) dated 28.03.2013 and, as such, on the basis of binding judgments of Apex Court and different High Courts and Benches of the ITAT, the said levy of penalty is otherwise not valid." 4. As regards to merits of the case, the assessee stated that the Ld. CIT(A) erred in confirming the levy of penalty u/s 271(1)(c) on disallowance of expenditure on account of "Magazine and Journal" to the tune of Rs. 92,92,170/-. 5. Brief facts of the case are that the assessee is engaged in the business of publication of Magazine and Journal and also in educational activity being a gr....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ls disallowance made at Rs. 92,92,170/-. 6. Aggrieved, the assessee preferred the appeal before Ld. CIT(A)/ NFAC. 7. In appeal, Ld. CIT(A)/NFAC confirmed the penalty in regard to disallowance made under the head "Magazine and Journals' by stating that in every case it cannot be argued that the addition has been made at estimate basis and, accordingly, penalty cannot be levied. The Ld. CIT(A)/NFAC stated that there is an estimating addition but it was stated that the assessee has admittedly incurred expenses as expenditure which has been brought on record by the AO by comparing the trading concern of another i.e., "Radisson". The Ld. CIT(A)/NFAC finally confirmed the penalty by observing vide para nos. 7.4 & 7.5 which read as under:- "7.4 In the present case, the fact that the appellant has deliberately incurred excess expenditure has been brought on record by AO by comparing the case of appellant with similar concern with similar turnover and by bringing out clear discrepancy between value/quantum of purchase of magazines vis a vis scrap income admitted for the year and by bringing out the fact that appellant failed to provide evidence for actual utilization of huge ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e as referred in para no.3.7, 4.4. 5.9 and 6.3." 9.1 Ld. Counsel for the assessee argued that the AO has initiated penalty proceedings for furnishing of inaccurate particulars and concealment of income on account of disallowance of expenses of Magazine and Journals. The Ld. Counsel for the assessee filed the copy of initiation of penalty notice filed before us, wherein the assessee was intimated that it had concealed the particulars of income. The Ld. Counsel for the assessee argued that this issue is now settled by various decisions of Hon'ble High Courts and he relied upon the Full Bench decision of Hon'ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT as reported in [2021] 125 Taxmann.com 253 (Bombay) vide order dated 11/03/2021 wherein, Hon'ble Bombay High Court has considered the decisions of Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Kar.). The Ld. Counsel also relied on the decision of Hon'ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Company Ltd. in ITA No.475/Del/2019 date 02/08/2019 wherein it has been held that the notice issued by the Assessing Officer is bad in l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....was not accepted on the basis that the books of accounts pertaining to dollar payments were not verifiable, payments have been made in dollar accounts to non-residents and the assessee company had filed only photocopies of vouchers. It was held that the onus was on the assessee to produce the original books of account and other relevant documents regarding payment in dollar. The AO accordingly rejected the books of account and estimated the profit @ 8 per cent. It was held that the assessee failed to establish the claimed loss and hence it has furnished inaccurate particulars of income. In this regard, the learned CIT(A) has given his finding in para Nos. 9 to 9.7 at page Nos. 36 to 38 of the first appellate order against penalty. In crux the assessee had offered the income from onshore supply and other contract receipts to tax on the basis of the audited books of accounts as maintained by them. The AO was of the opinion that there were various discrepancies in the books of account maintained by the assessee and accordingly the books were rejected under s. 145 of the Act and the income from the above activity was estimated by the AO by applying 8 per cent profit rate on the gross r....