2019 (7) TMI 667

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..... AO is under obligation to specify the appropriate limb of clause (c) of section 271(1) at the time of initiation as well as at the time of levy of penalty. Without going into the merits of the case, we set-aside the order of the CIT(A) and direct the Assessing Officer to delete the entire penalty imposed by him. Accordingly, the grounds raised by the assessee are allowed on legal issue. - Appeal of the assessee is allowed.
Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM For the Assessee : Shri Suhas Bora And Shri Sanket Bora For the Revenue : Smt. Shabana Parveen ORDER PER D. KARUNAKARA RAO, AM: This appeal is filed by the assessee against the order of CIT(A)-7, Pune dated 25.10.2016 for the Assessment Year 2009-10. 2. The g .....

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..... t was seen from the order that no penalty proceedings has been initiated u/s 271(1)(c) in the case of revised return income but has been initiated only on addition of ₹ 1,35,384/- 5. The appellant craves leave to add, alter, amend or delete any of the above grounds of appeal." 3. Briefly stated the relevant facts include that the assessee is engaged in the business of hiring of vehicles and trading in spare parts. The assessee filed the return of income declaring total income of ₹ 9,51,980/-. At the end of the assessment u/s 143(3) of the Act, the Assessing Officer assessed the total income of the assessee after making certain additions on account of (i) undisclosed cash credits & others of ₹ 38,16,182/- and (ii) disal .....

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..... ry 359 ITR 565, Ld. Counsel demonstrated that the penalty levied by the Assessing Officer is unsustainable in law and the same is wrongly upheld by the CIT(A). 8. On the other hand, ld. DR for the Revenue heavily relied on the orders of the authorities below. 9. We heard both the parties on this legal issue and also perused the material available on record. We find that this is a case where the Assessing Officer failed to record proper satisfaction while initiating and levying the penalty u/s 271(1)(c) of the Act. In this regard, we pursed the orders of the Revenue authorities. On perusal of para 2.2 of the assessment order, we find the following is the reasons for initiation of penalty proceedings :- "2.2 ………. &h .....

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