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TMI Blog2020 (1) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... ntioned in the notice issued under Section 271(1)(c) r.w.s. 274. Since in the instant case also the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) of the Act has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) of the Act is not sustainable and has to be deleted. Although the Ld. DR submitted that mere non-striking off of the inappropriate words will not invalidate the penalty proceedings, however, SSA S Emerald Meadows [ 2016 (8) TMI 1145 - SC ORDER] - when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. [ 2019 (8) TMI 409 - DELHI HIGH COURT] will be applicable in the present case. Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to delete the penalty so levied. - Decided in favour of assessee. - ITA Nos. 3936 & 3937/DEL/2019 - - - Dated:- 31-12-2019 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal conditions stipulated under the Act and penalty so sustained is plainly without authority of law accordingly same deserves to be quashed. 2. That on the facts and in the circumstances of the case and in law, learned CIT(A) erred in upholding the penalty levied unlawfully u/s 271(1)(c) of the Act where there the addition made in quantum proceedings is itself based on estimates and without any clarity as to actual existence of stated income which is nowhere established in extant case accordingly penalty so sustained is plainly without authority of law accordingly same deserves to be quashed. Prayer: To quash the penalty u/s 271(1)(c) by Ld AO as confirmed by Ld CIT(A); That the appellant craves leave to add, to amend, modify, rescind, supplement or alter any of the grounds stated herein above, either before or at the time of hearing of this appeal. 3. In both the appeals, the issue contested herein are identical, therefore, we are taking up facts of ITA No. 3936/DEL/2019 for A.Y. 2014- 15. The assessee is a partnership firm which is engaged in the business of civil construction. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Factory (2013) 359 ITR 565 (Kar). The Ld AR further submitted that the Hon ble Delhi High Court in case of Pr. CIT Vs. M/s. Sahara India Life Insurance Company Ltd. (ITA No.475/2019 vide order dated 02.08.2019) held that notice issued by the Assessing Officer would be bad in law if it did not specify which limb of Section 271(1)(c) of the penalty proceedings had been initiated. The Ld. AR further submitted that in assessee s own case for A.Y. 2012-13 the penalty was deleted on the same ground being ITA No.7173/Del/2017 order dated 21.06.2018 A.Y. 2012-13. 5. The Ld. DR submitted that the assessment order and the penalty order was just and proper, as the penalty u/s 271(1)(c) was initiated after duly recording satisfaction regarding undisclosed income on account of cash receipts and expenditure made thereunder. As the jurisdiction condition for imposition of penalty u/s 271(1)(c) of the Act is satisfaction of the Assessing Officer, the Assessing Officer assume the jurisdiction to initiate the penalty proceedings, the moment he has satisfied that the necessary conditions have been satisfied. Thus, there was an application of mind by the Assessing Officer and hence ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to note that in assessment order while initiating the penalty u/s 271(1)(c) of the Act, no satisfaction was recorded as to whether both the limbs of 271(1)(c) of the Act has been invoked that all concealment of income and furnishing of inaccurate particulars. Merely stating that 271(1)(c) of the Act penalty has to be initiated does not amount to satisfaction. The notice u/s 271(1)(c) of the Act is also silent on the particular limb under which the penalty order was passed. First of all, in the notice issued u/s 274 r.w.s 271(1)(c) of the Income Tax Act, 1961, there was no specific charges as relates to concealment of income or furnishing of inaccurate particulars of income. From the notice dated 13.12.2016 and 08.05.2017 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. Besides that the Assessment Order also did not specify the charge as to whether there is concealment of income or furnishing of inaccurate particulars of income in assessee s case. Therefore we are taking up the contention of the assessee that there is no par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the furnishing of inaccurate particulars, the ratio laid down by the Hon ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. (supra) will be applicable in the present case. The Hon ble Delhi High Court held as under: 21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA s Emerald Meadows (2016) 73 Taxman.com 241(Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the IT ..... X X X X Extracts X X X X X X X X Extracts X X X X
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