2025 (8) TMI 45

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....y order dated 25.03.2022 passed by DCIT - Central Circle - 1(2), Bengaluru ("the Ld.AO") levying the penalty of Rs. 66,43,500/- was allowed and penalty was directed to be deleted. 2. Ld. AO is in appeal by raising the following grounds: - "1. Whether on the facts & circumstances of the case and in law, the Id. CIT(A)has erred in deleting the penalty-initiated u/s 271(1)(c) of the Act by Assessing Officer after recording proper reason and selecting appropriate limb as mentioned in section. 2. Whether on the facts & circumstances of the case and in law, the Id. CIT (AY/ has erred by not considering the due satisfaction recorded in assessment order and deleted the penalty proceedings by stating that no satisfaction has been recorded." 3.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the explanations of the assessee and held that assessee has furnished inaccurate particular of income of Rs. 2.15 Crores and thereafter levied penalty of Rs. 66,43,500/- as per penalty order dated 25.03.2022. 6. The assessee challenged the same before Ld.CIT(A) wherein it was stated that merely because the treatment given to the interest income has not been accepted by the Ld. AO neither assessee has furnished inaccurate particular of income, nor is it liable for any penalty. Assessee further relied upon the decision of the Hon'ble Karnataka High Court in the case of CIT v. Manjunatha Cotton &Ginning Factory [35 taxmann.com 250 (kar.)] which held that when there is no specific charge in the notice, penalty levied on the basis of that noti....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....e that; (i) The AO has not recorded its satisfaction in the assessment order for initiation of penalty proceedings. (ii) The AO in the penalty notice has not specified the limb of section 271(1)(c) for initiating penalty proceedings. The applicant places its reliance on the Hon'ble Jurisdictional High Court's order in the case of Manjunatha Cotton &Ginning Factor. 4.3.1 The Assessment order, penalty order and material available on record have been carefully perused. It is noticed that in the assessment order, the AO has not recorded any satisfaction for initiation of penalty u/s 271(1)(c). It is seen that there is a mere mention as "Issue penalty notice u/s. 271(1)(c) of the IT Act, 1961 accordingly." Further, the notice under 271(1....