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TMI Blog2018 (7) TMI 1482X X X X Extracts X X X X X X X X Extracts X X X X ..... niences and brevity. 3. At the outset, we find that the Cross Objection filed by the assessee is delayed by 05 days and the assessee has filed condonation petition praying for condonation of delay. We heard the parties on this preliminary issue, and having regard the reasons given in the petition, we condone the delay and admit the Cross Objections for hearing. 4. However, in this appeal, the Revenue has raiseda multiple grounds of appeal, but at the time of hearing, the main grievance of the Revenue has been confined to the issue that the ld. CIT(A) has erred in deleting penalty under sec. 271(1)(c) of the Act partly and in directing to AO to delete the penalty levied under sec. 271(1)(c) of the Act in respect of Rs. 50, 28, 374/-being other interest income and Rs. 6, 53, 537/- as FDR interest aggregating to Rs. 56, 81, 911/- 5. On the other hand, the main grievance of the assessee in his original cross objection and additional grounds of cross objections are that theld. CIT(A) has erred in upholding the order passed by the Assessing Officer under section 271(1)(c) of the Act in respect of addition on account of interest of Rs. 37, 71, 024/-, as the assessee has offered the sai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been selected for scrutiny, the interest income shown in the profit & loss account would have been accepted as business income instead of income from other sources under sec. 143(1) of the Act, thereby the assessee would have evaded payment of tax. Based on the reasons mentioned above, the Assessing Officer levied penalty to the tune of Rs. 29, 20, 956/-. 8. Aggrieved by the penalty order passed by the Assessing Officer, the assessee carried the matter in appeal before the ld. CIT(A), who has deleted the penalty partly. The ld. CIT(A) noted that in respect of other interest income duly disclosed in the financial statement to the tune of Rs. 56, 81, 911/-. The assessee claimed this interest as eligible for deduction under sec. 80IB and the fact that earning of interest has been disclosed by the assessee. Therefore ld. CIT(A) relying on the decision of the Hon`ble ITAT, Mumbai in Roborant Investments Pvt. Ltd. (7 SOT 181) (Mumbai) held that the assessee having disclosed the particulars of his interest income in the financial statements had made a full disclosure. The claim of the assessee that the interest also qualifies for a deduction under sec. 80IB did not stand the scrutin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing inaccurate particulars of income while imposition of penalty on the other limb i. e. concealment of income. Further, the Tribunal also noted that notice issued under Section 274 of the Act is in a standard proforma, without having striked out irrelevant clauses therein. This indicates non- application of mind on the part of the Assessing Officer while issuing the penalty notice. " 11. The Counsel further stated that the assessee, vide letter dated 19/03/2014 had explained to AO that the interest income of Rs. 37, 71, 024/- reflected in 26AS statement received from M/s. Bau Developer P. Ltd, is offered for taxation in the financial year 2011-12 i. e. Assessment Year 2012-13. The date of booking of the transaction in respect of M/s. Bau Developer P. Ltd is on 01. 08. 2011 (vide pb 11), which falls in assessment year 2012-13, therefore, the assessee has rightly offered interest income of Rs. 37, 71, 024/-for taxation in the Assessment Year 2012-13. 12. The ld Counsel also submitted that the interest amounting to Rs. 56, 81, 911/-was eligible for deduction under section 80IB of the Act and the assessee had disclosed the fact of earning said interest in the financial statements. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... up by the Department, the additional income from the HUF would have gone unnoticed and it would have escaped from computation of tax. 11. In the light of above observations, it is clear that what happened subsequent to February 6, 1998, though not crucial, the appellate authorities have placed much reliance on subsequent events than the categorical declaration in return of income on February 6, 1998. The criterion is not the contents of the letter dated February 23, 1998, nor the revised return filed in response to the scrutiny notice. The criterion in this case iscategorical declaration made by the assessee at the time of submission of returns. The categorical statementwith reference to the above reasoning clearly indicates there is concealment of income from the HUF, i. e. , knowingly the assessee furnished inaccurate particulars of income for computation of tax. " In addition to this, ld. DR for the Revenue also submitted that ld CIT(A) deleted the penalty U/s 271(1) (c) of the Act, in respect of other interest income of Rs. 56, 81, 911/- without considering the facts in right perspective. The assessee had made wrong claim, therefore, the penalty should be levied. 14. We h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s u/s. 274 of the Act r. w. s. 271 (1) (c ) of the Act dated 20. 04. 2013, and served on the assessee, wherein we note that the AO has not ticked the limb of charge/default for which the penalty is being initiated against the assessee. We find that the notice has been issued for "having concealed the particulars of income or furnished inaccurate particulars of such income". But no any particular limb has been struck off or ticked by assessing officer. We note that in a similar case the Hon'ble High court of Karnataka in the case of CIT vs Manjunatha Cotton and Ginning Factory reported in (2013) 359 ITR 565 (Kar) has cancelled the penalty taking note of the fact that the penalty notice did not spell out clearly as to whether the assessee has concealed the particulars of income or has furnished inaccurate particulars of Income. We also find that Hon'ble Karnataka High Court in the case of CIT Vs. SSA's Emerald Meadows, reported in (2016) 73 taxmann. com 241 (Kar) endorsed the same view in Manjunatha Cotton and Ginning Factory (supra) and held as under: "3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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