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TMI Blog2019 (1) TMI 215X X X X Extracts X X X X X X X X Extracts X X X X ..... ples of natural justice is offended. On the basis of such proceedings no penalty could be imposed on the assessee. Also see CIT VERSUS SHRI SAMSON PERINCHERY [2017 (1) TMI 1292 - BOMBAY HIGH COURT] - Decided in favour of assessee. - ITA Nos.2857 & 2858/PUN/2016 - - - Dated:- 2-1-2019 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Pramod Shingte For the Revenue : Shri Abhishek Meshram ORDER PER VIKAS AWASTHY, JM : These two appeals by the assessee are directed against the order of Commissioner of Income Tax (Appeals)-12, Pune dated 09-09-2016 common for the assessment years 2009-10 2010-11, confirming levy of penalty u/s.271(1)(c) of the Income-tax Act, 1961 (hereinafter referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 5 (Karn.). 3. The ld. AR submitted that, similarly for the A.Y. 2010-11, the AO in assessment order dated 08-01-2014 u/s.143(3) r.w.s 153A has initiated penalty proceedings in respect of addition of undisclosed interest receipts ₹ 64,983/- and undisclosed investment ₹ 2,20,000/- without specifying the charge for initiating penalty proceedings u/s.271(1)(c). While passing order levying penalty dated 23-05-2014, the AO in para 9 of the order has mentioned both the limbs of section 271(1)(c). The manner of recording satisfaction and the levy of penalty u/s.271(1)(c) is contrary to the law laid down in the case of CIT Vs. Samson Perinchery (supra) and Manjunatha Cotton Ginning Factory (supra). 4. On the other hand, Shri Abhi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 2,00,000/- on a/c of capital introduction and ₹ 3,110/- on a/c of admittance of additional income . 7. The second addition in A.Y. 2009-10 for which penalty is initiated is ₹ 2 lakhs on account of unexplained capital. While initiating penalty, the AO has not specified any of the charge u/s.271(1)(c). However, while passing the order levying penalty, the AO has mentioned both the limbs. The relevant extract of penalty order (para No.8) has already been reproduced hereinabove. 8. The Hon ble Karnataka High Court in the case of CIT Another Vs. Manjunatha Cotton and Ginning Factory (supra) held that the assessee should know the grounds which he has to meet specifically. Otherwise, the principles of natural justice is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and the penalty order dated 23-05-2014 is held to be invalid. Accordingly, the appeal of the assessee for A.Y. 2009-10 is allowed. A.Y. 2010-11 : 9. A perusal of the assessment order for A.Y. 2010-11 shows that the penalty proceedings have been initiated u/s.271(1)(c) in respect of two additions, i.e. (1) undisclosed investment ₹ 2,20,000/-, and (2) undisclosed interest receipts ₹ 64,983/-. The AO while recording satisfaction for initiation of penalty qua above additions has not mentioned any of the limbs/charge of section 271(1)(c). The AO has merely recorded Penalty proceedings u/s.271(1)(1) is separately initiated . The AO has failed to specify the charge u/s.271(1)(1), i.e. whether the penalty proceedings are ..... X X X X Extracts X X X X X X X X Extracts X X X X
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