2026 (4) TMI 1027

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.... opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The order levying penalty u/s. 271[1][c] of the Act, is bad in law in as much as, the learned AO has neither reached any satisfaction nor has such satisfaction been recorded in the assessment order and consequently, the very initiation of proceedings u/s. 271[1][c] of the Act, is not in accordance with the requirements of Section 271[1] of the Act and consequently, the order of penalty founded on the invalid initiation of penalty proceedings is liable to be cancelled. 3. Without prejudice to the above, the order of penalty passed u/s 271[1][c] of the Act is bad in law as the notice issued under section 274 rws 271 of the Act....

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....rosecuting the appeal and also order for the refund of the institution fees as part of the costs." 2. The brief facts of the case are that the assessee is an individual and earned income from the house property as well as the interest income. The assessee filed his return of income which was selected for limited scrutiny to examine the four issues. Notices u/s. 143(2) as well as u/s. 142 were issued to the assessee. The assessee also filed her submissions. The AO after verifying the submissions made by the assessee alleged that the assessee had declared a lesser rental income when compared with the statement in form 26AS. The AO observed that the assessee had bifurcated the rental income into two, one showing the rental income and the an....

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....e assessee filed their detailed reply and submitted that the entire rental income was declared in the return including the hire charges received on amenities but the hire charges received on amenities were provided under the head income from business. Insofar as the long term capital gains, the assessee submitted that all the details were furnished and the said capital gain was reinvested in another house property by the assessee along with her son and therefore the denial of deduction u/s. 54 was not justified. The assessee therefore submitted that there was a dispute about the classification of income and denial of full exemption on the capital gains and therefore submitted that the same would not be a reason for imposing penalty u/s. 271....

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....ent has been completed. The said order was challenged by the assessee before the Ld.CIT(A) and later on before this Tribunal. 6. The Tribunal vide its order dated 08/05/2020 in ITA No. 2483/Bang/2019 had accepted the submissions made by the assessee and allowed the full deduction u/s. 54 of the Act which was denied by the AO. Therefore, the computation made by the assessee was accepted by the Tribunal and therefore there is no question of concealment of any income nor furnishing of inaccurate particulars of income. When there is no concealment of any income nor furnishing of inaccurate particulars of income, automatically the penalty u/s. 271(1)(c) could not be imposed. Therefore on merits, the assessee is entitled for not levying the pe....