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TMI Blog2019 (10) TMI 511X X X X Extracts X X X X X X X X Extracts X X X X ..... the present case the AO in the penalty proceedings had not examined the entire issue afresh and even otherwise the identity of the creditor and genuineness of the transaction has not been found fault with, therefore, we are of the view that the explanations and the documents relied upon by the assessee to prove the creditworthiness were only found to be inadequate and not found to be false. Under the set of facts, we are of the view that the Explanation to Section 271(1)(c) of the Act would come to help of the assessee. Hence on conspectus of the matter, we are of the view that the addition of cash credit confirmed by the ITAT in the facts and circumstances of the instant case, would not necessitate levy of penalty u/s 271(1)(c) of the Act, as the same in our view cannot be considered to be concealment of income. Accordingly, we set aside the order of the ld. CIT(A) on this issue and direct the AO to delete the penalty. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... reinabove. 3.1 The Ground No. 1 and 2 raised by the assessee are interrelated and interconnected and relates to challenging the order of the ld. CIT(A) in confirming the order passed by the AO u/s 271(1)(c) of the Act without striking off the irrelevant portion of the printed show cause notice dated 25-03-2015. We therefore, thought it fit to dispose off these grounds by a common order. 3.2 During the course of hearing, the ld.AR of the assessee submitted that penalty levied by the AO is unlawful, illegal and unjustified. The ld.AR of the assessee has filed the following written submission. ''The levy of penalty is unlawful, illegal and unjustified. The same is assailed on the following grounds: - 1. Show cause notice issued on 25.03.2015 & 11.08.2015 are routine: - The show cause notice issued along with the assessment order was in routine manner and the Learned Assessing Officer has not strike off that under which limb the assessee has committed offence. In the assessment order also the Learned Assessing Officer in last two has mentioned "Penalty proceeding u/s 271(1)(c) for concealing the particular of income and furnishing inaccurate particulars of income have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tax Officer, Ward - 6(2), Jaipur 3.3 On the order hand, the ld. DR relied on the orders passed by the Revenue authorities. 3.4 We have heard the rival contentions and perused the materials available on record. On the perusal of the notice dated 25-03-2015 issued by the Revenue authorities u/s 274 read with section 271(1)© of the Act, we noted that Revenue authorities has not struck off inappropriate portion contained in the notice and has mentioned both limbs contained in Section271(1)© of the Act which shows that notice has been issued in a very routine manner and without application of mind as it nowhere specifies concealed/inaccurate particulars of income on which assessee was required to show cause. Even the said show cause notes issued by the AO does not indicate any ground for levy of penalty for which the assessee could put its defence. In this respect, we rely on the decision of Hon'ble Karnataka High Court in the case of CIT vs Manjunath Cotton and Ginning Factory 359 ITR 565 wherein it was held that notice u/s 274 of the I.T. Act, 1961 should specifically state whether penalty is being proposed to the imposed or conceal of income or for furnishing of inac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the evidences furnished by the assessee was not sufficient for determining the creditworthiness of the share applicant. Therefore on such type of addition no penalty is leviable. The number of cases are there where the share holder is found in existence and if share application money was deposited through proper banking channel then penalty u/s 271(1)(c) has been deleted. It has been held by the INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "A", MUMBAI in ITA No. : 6267/Mum/2013 (Assessment year: 2007-08) in the case of DCIT (Appellant) vs. M/s Amore Jewels P Ltd. (Respondent) Date of Order: 04/03/2016 that "The Explanation 1 to section 271(1)(c) raises rebuttable presumption and once the assessee has furnished all the evidences in support of its explanation and has substantiated his claim then the onus cost upon him is discharged and onus then shifts upon the AO to prove that such an explanation or evidence is false" In our case no such enquiry was made by the Learned Assessing Officer to prove that the explanation furnished by the assessee was false. Therefore the finding given in the above case are applicable. The finding given in last para of the order is reprodu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... particulars of income. Whether a cash credit addition would fall in the category of concealment of particulars of income or not would depend upon the facts and circumstances of each case. 7. It is pertinent to note that the identity of the creditor and genuineness of the transaction have not been found fault with. We further notice that the Explanations and documents furnished by the assessee to prove the creditworthiness were only found to be inadequate and not found to be false. Under these set of facts, we are of the view that the Explanation 1 to section 271 (1)(c) of the Act would come to the help of the assessee. Hence, on conspectus of the matter, we are of the view that the addition of cash credits confirmed by the ITAT, in the facts and circumstances of the instant case, would not necessitate levy of penalty under section 271(1)(c) of the Act, as the same, in our view, cannot be considered to be concealment of particulars of income. Accordingly, we set aside the order of the ld. CIT(A)on this issue and direct the AO to cancel the penalty levied on the cash credit addition." Therefore in the light of above observations the penalty deserves to be deleted. '' 4.3 On th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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