TaxTMI 
TaxTMI 
TaxTMI 
2025 (1) TMI 1735
X X X X Extracts X X X X
X X X X Extracts X X X X
....he circumstances of the case and in law, the Ld. CIT(A) has erred in allowing the appeal of assessee against the penalty order passed u/s 271(1)(c) of the IT Act, 1961 on the issues of Pre-operative expenses and customer Acquisition Costs amounting to Rs. 1,26,84,51,180/- for A.Y - 2009-10 and deleting the penalty ignoring the fact that the assessee has furnished inaccurate particulars within the meaning of explanation 1 to the sub-section (1) of the section 271(1)(c) of the Income Tax Act, 1961. 3 "On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in deleting the penalty by ignoring decision of Hon'ble jurisdictional High Court in case of CIT vs Zoom Communication P Ltd (2010) 327 ITR 510, CIT vs NG Technologies Ltd 370 ITR7 and CIT vs Escorts Finance Ltd. (2010) 328 ITR 44. 4 "The Appellant craves, leave or reserving the right to amend, modify, alter, add or forego any of the Ground(s) of Appeal at any time before or during the hearing of this appeal." ITA No.- 1208/Del/2019 "1. "The impugned order of the CIT(A) is bad in law as well as on facts of the case." 2 "On the facts and in the circumstances of the....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 5. "The appellant craves to leave or reserving the right demand, modify after, add or forego any ground(s) of appeal at any time before or during the hearing of this appeal." 3. Similar grounds have been raised in these appeals, involving Pre-operative expenses, customer acquisition costs and the issue of penalty deletion u/s 271(1)(c) of the Act. 4. We take ITA No. 1207/Del/2019 as a lead case, to adjudicate these appeals. 4.1 Brief facts are summarized in this case as may be the assessee company e-filed its return of income declaring a total loss of Rs. 1163,19,51,248/- for the assessment year 2009-10 on 28.09.2009. The case was selected for scrutiny in CASS. The assessment was completed u/s 143(3) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 26.12.2011 determining a total loss of rs. 571,64,72,090/- by making certain additions. The AO initiated penalty proceedings u/s 271(1) r.w.s. 274 on the disallowance made vide order u/s 143(3) of the I.T. Act. Aggrieved the assessee company filed an appeal before the CIT(A) against the AO order dated 26.12.2011 u/s 143(3) of the I.T. Act. 4.2 The Ld. CIT(A) finally passed an order dated 17.10.2016 in ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... claim of expenditures have been denied. Mere disallowance of stated claim of expenditures may not ipso facto attract penalty as has been held by the Hon'ble Apex Court in the case of Reliance petrochemicals (2010) 11 SCC 762 wherein the Hon'ble Apex Court has interalia held thus: "A glance of provision of section 271(1)(c) would suggest that in order to be covered, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The instant case was not the case of concealment of the income. That was not the case of the revenue either. It was an admitted position in the instant case that no information given in the return was found to be incorrect or inaccurate. It was not as if any statement made or any detail supplied was found to be factually incorrect. Hence, at least, prima facie, the assessee could not be held guilty of furnishing inaccurate particulars. The revenue argued that submitting an incorrect claim in law for the expenditure on interest would amount to giving inaccurate particulars of such income. Such cannot be the interpretation of the concerned words. Th....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e rival contentions and perused the material available on record. The Ld. CIT(A) has deleted the penalty order imposed by the Ld. Assessing Officer. 7. There is a provision in section 271(1)(c) of the Act, that if the Ld. AO in the case of proceedings is satisfied that any person has concealed the particulars of his income or furnished particulars of such income, may direct that such person shall pay by way of penalty as mentioned in the section 271(1)(c)(iii). 8. In the course of hearing, reiterating the grounds of appeal, the Ld. DR submitted that the Ld. CIT(A) ignored the relevant and material fact that assessee has furnished inaccurate particulars within the meaning of explanation 1 to the Section 271(1)(c) of the Act. 9. Per contra, the Ld. AR submitted that the notice dated 28.03.2013, 26.12.2011 issued by the Ld. AO under section 271 r/w section 274 of the Act, not specify that in which of the reasons penalty was proposed to impose i.e. whether for concealment the particulars of income or furnishing inaccurate particulars of such income and it is mandatory that notice should be specify that which limbs of section 271(1)(c) of the Act, the penalty proceedings had be....
X X X X Extracts X X X X
X X X X Extracts X X X X
....he Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016." 22. On this issue again this court is unable to fund any error having been committed by the ITAT, No substantial question of law arises." 13. On the basis of foregoing submissions / discussions and respectfully following the binding judicial precedents cited hereinbefore, we find that notice u/s 271(1)(c) r/w 274 of the Act itself bad in law which was unable to specify that in which limb of section 271(1)(c) penalty processed to be imposed and in that case foundation of imposing of penalty in question legally missing, which is mandatory required by law. It is relevant to mention here in the instant case, perusal of notice placed on record, evident the Ld. AO had not struck off or ticked the relevant portion thereon mentioning the specific offence committed by the assessee and above legal infirmity cannot be ignored. Hence, there is material substance in the submission advanced and ground raised by assessee that notice in question issued u/s 274 r/w 271(1)(c) is illegal and bad in law as same is without any specific charge, so issues / grounds raised by the assessee allowable and on t....