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TMI Blog2018 (5) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... of income, as well, furnishing inaccurate particulars of income. However, the penalty has been levied only on the charge of furnishing inaccurate particulars of income . The manner in which satisfaction has been recorded clearly falls short of legal requirement and hence the penalty proceedings and penalty order is vitiated. Thus, the order levying penalty has to be set aside. - Decided against revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... ty of ₹ 64,91,794/- u/s. 271(1)(c) on account of furnishing inaccurate particulars of income to the extent of addition confirmed by Tribunal. Against the order passed u/s. 271(1)(c) dated 13-08-2014, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by placing reliance on the decision of Tribunal in assessee‟s own case for assessment years 2005-06 and 2006-07 deleted penalty in toto. Now, the Revenue is in appeal against the order of Commissioner of Income Tax (Appeals). 3. Dr. Vivek Aggarwal representing the Department submitted that during the course of assessment proceedings it was found that the assessee company has shown creditors to the extent of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... creating bogus creditors in the books. The ld. DR further submitted that the Commissioner of Income Tax (Appeals) has erred in following the order of Tribunal in assessee‟s own case for assessment years 2005-06 and 200607. The facts in those years are distinguishable. In the present case, the Assessing Officer has made detailed investigation and the facts are available on record. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals) and upholding the order of Assessing Officer. 4. On the other hand Shri R.G. Nahar appearing on behalf of the assessee vehemently defended the order of Commissioner of Income Tax (Appeals) in deleting penalty. The ld. AR submitted that the Tribunal has made ad hoc addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1,77,40,780/-. A perusal of the order of Co-ordinate Bench in ITA No. 866/PN/2009 in assessment proceedings for the impugned assessment year indicate that the partial addition has been sustained merely on estimations. It is a well settled law that no penalty u/s. 271(1)(c) is sustainable where ad hoc additions are made. 6. The ld. AR has further pointed that there is a defect in recording satisfaction for initiating penalty proceedings u/s. 271(1)(c). A perusal of assessment order (para 7.7) shows that the Assessing Officer has recorded satisfaction for initiating penalty proceedings u/s. 271(1)(c) in respect of addition under reference by mentioning both the limbs of section 271(1)(c) i.e. concealing particulars of income and furnishing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty has held the penalty order bad in law. The relevant extract of the order of Hon‟ble High Court reads as under : "6. The above submission on the part of the Revenue is in the face of the decision of the Supreme Court in Ashok Pai v/s. CIT 292 ITR 11 [relied upon in Manjunath Cotton & Ginning Factory (supra)] - wherein it is observed that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act, carry different meanings/ connotations. Therefore, the satisfaction of the Assessing Officer with regard to only one of the two breaches mentioned under Section 271(1)(c) of the Act, for initiation of penalty proceedings will not warrant/ permit penalty being imposed for the other breach. Thi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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