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TMI Blog2019 (4) TMI 680X X X X Extracts X X X X X X X X Extracts X X X X ..... cts of the case are that in this case return of income was filed on 30.10.2013 declaring an income of ₹ 1,37,130/-. The assessment u/s. 143(3) of the Income Tax Act, 1961 (in short Act ) was completed vide order dated 28.3.2016 at an income of ₹ 45,84,206/- by making the addition on account of income in reset of TDS amount claimed less already declared in ITR ₹ 12,66,547/-; income in respect of other credit entries in bank ₹ 28,93,417/- and income from other sources ₹ 2,87,112/- thus totaling to ₹ 44,47,076/- Further, penalty proceedings were initiated by the AO with regard to the above additions and accordingly a show cause notice dated 2.8.2016 was issued to the assessee. In response to the same, the assessee filed its reply dated 26.9.2016. However, the assessee has not preferred an appeal before the Ld. CIT(A) against the quantum addition. The AO in the penalty proceedings has observed that the assessee has not in any way substantiated the explanation furnished by it and assessee had no valid reason. Rather, the quantum and / or nature of the additions made suggest that it was certainly a case of gross and willful neglect on the part o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aforesaid penalty notice dated 28.3.2016, in my considered opinion, the AO is not clear under which charge the penalty is leviable i.e. whether it is on account of concealment of income or furnishing of inaccurate particulars. Hence, I am of the view that the AO has initiated the penalty for concealment of particulars of income or furnishing of inaccurate particulars, which is contrary to the provisions of law and against the spirit of the various decisions of the Hon ble Supreme Court and Hon ble High Court. Therefore, the penalty in dispute is not sustainable in the eyes of law. My aforesaid view is fortified by the following decisions:- i) CIT Anr. Vs. M/s SSA s Emerald Meadows 2015 (11) TMI 1620 Karnataka High Court has held that Tribunal has correctly allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) to be bad in law as it did not specify which limb of Section 271(1) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of Commissioner of Income Tax vs. Manjunatha Cotton and Ginning Factory (2013) (7) TMI 620- Karanataka High Court. Thus since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion no substantial question of law arises decided in favour of assessee. ii) CIT Anr. Vs. M/s SSA s Emerald Meadows Hon ble Supreme Court of India reported in 2016 (8) TMI 1145 Supreme Court. The Apex Court held that High Court order confirmed (2015) (11) TMI 1620 (Supra) Karnataka High Court. Notice issued by AO under section 274 read with section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income De ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is ground of appeal is rejected. 8. Keeping in view of the aforesaid finding of the Ld. CIT(A), we are of the considered view that the AO has passed the assessment order wherein the AO has recorded his satisfaction on the page 2, 2nd para viz. I am satisfied that it is a fit case for initiation of penalty proceedings u/s. 271(1)(c) of the Act for furnishing inaccurate particulars of income/concealment of income. Further the AO vide his Notice dated 31.12.2007 for initiating the penalty and directed the assessee to appear before him at ---------AM/PM on --------200------ and issued a Show Cause to the assessee stating therein that why an order imposing the penalty of amount should not be made u/s. 271(1)(c) of the I.T. Act, 1961. After perusing the notice dated 31.12.2007 issued by the AO to the assessee, we are of the view that the AO has initiated the penalty for furnishing inaccurate particulars of income/ concealment of income, but in the penalty order dated 06.11.2009 he has stated that he is satisfied that the assessee has furnished the inaccurate particulars of income. In our view the penalty in dispute is not sustainable in the eyes of law, because the AO has not rec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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