2019 (4) TMI 1661

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..... bench, the penalty imposed is liable to be struck down on this score alone. Accordingly, we set aside the first appellate order passed by the CIT(A) in this regard and direct the AO to delete the penalty. - Decided in favour of assessee. - I.T.A. No. 3021/Ahd/2016 - - - Dated:- 25-4-2019 - SHRI PRADIP KUMAR KEDIA, ACCOUNTANT MEMBER AND SHRI MAHAVIR PRASAD, JUDICIAL MEMBER For The Appellant : Shri D. K. Parikh, A.R. For The Respondent : Shri Lalit P. Jain, Sr. DR ORDER PER PRADIP KUMAR KEDIA - AM: The captioned appeal has been filed at the instance of the assessee against the order of the Commissioner of Income Tax (Appeals), Gandhi .....

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..... about the nature of default committed by the assessee, the penalty is not sustainable in law. We find that the aforesaid legal issue has been dealt with by the co-ordinate bench in following terms: 9. We have carefully considered rival submissions and perused the assessment order, penalty order and the first appellate order in penalty proceedings. The material referred in the course of hearing was also perused. As noted above, the controversy revolves around the maintainability of penalty on income by way of short term capital gain not included in the return of income but offered for taxation in the course of scrutiny proceedings. In this regard, it is noted that the assessee has readily offered the income on sale in the .....

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..... quite vague. The satisfaction in the course of the assessment was formed for alleged furnishing of inaccurate particulars of income . The penalty notice does not specify the nature of default and thus suffers from vice of ambiguity. The AO, however, in departure with the satisfaction formed in the assessment proceedings, went on to impose penalty on a different ground i.e. concealment of particulars of income. Ostensibly, the original basis of initiation of penalty has been altered in a significant way by the AO himself by imposing the penalty. The basis for formation of satisfaction, thus, was altered and rendered nonexistent. Hence, in the absence of continuity in the satisfaction of the AO at the quantum stage vis- -vis penalty stage, .....

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