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TMI Blog2020 (2) TMI 834X X X X Extracts X X X X X X X X Extracts X X X X ..... ecorded that the assessee has not disclosed the transaction in the bank statement of his proprietory concern. The AO nowhere recorded that the assessee was with some other name or running more than one proprietorship. We noted that the AO, failed to discharge his onus as he was not sure at the initiation of penalty under section 271(1)(c) for which specific charge of penalty has been initiated by the AO. Even while levying the penalty also, the AO simply relied on the Explanation 1to s. 271(1)(c). Therefore, in our opinion, the basis of levy of penalty itself is not correct. Basis of levy of penalty itself is not correct. Thus, we direct the assessing officer to delete the penalty. In the result the appeal of the assessee is allowed. - ITA No. 4569/Mum/2018, ITA No. 4570/Mum/2018, ITA No. 4571/Mum/2018 - - - Dated:- 10-2-2020 - Shri Shamim Yahya (A.M.) And Shri Pawan Singh (JM) For the Appellant : Shri S.M. Makhija (AR) For the Respondent : Shri Michael Jerald (DR) ORDER PER PAWAN SINGH, JM : 1. These three appeals filed by the assessee are directed against the common order of CIT(A)-3, Nasik (camp-office-Thane) for the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... etary concern. Since the assessee failed to disclose such income, the assessee has concealed his income. The assessing officer levied 100% of tax sought to be evaded. The AO levied penalty @100% and worked out penalty of ₹ 3,85,920/-. On appeal before ld. CIT(A), the action of AO was confirmed. Thus, further aggrieved the assessee has filed the present appeal before us. 5. We have heard the submissions of Ld.AR of the assessee and the Ld. DR for the revenue and perused the material available on record. The Ld.AR of the assessee submits that the assessee accepted peak credit addition made by AO and paid tax on such addition. The Ld.AR of the assessee further submits that while passing the assessment order, the AO initiated penalty for concealing the particulars of income and furnishing inaccurate particulars of income. The AO failed to apply his mind at the time of passing assessment order. The AO levied penalty for concealment of income. The Ld.AR submits that the AO has not applied his mind while passing the assessment order as well as penalty order. In support of his submission, the Ld.AR of the assessee relied upon the following decisions:-. Armory Internation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... its. ** ** ** Explanation 1. - Where in respect of any facts material to the computation of the total income of any person under this Act, - (A) such person fails to offer an explanation or offers an explanation which is found by the AO or the CIT(A) or the Principal CIT or CIT to be false, or (B) such person offers an explanation which he is not able to substantiate and fails to prove that such explanation is bona fide and that all the facts relating to the same and material to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of cl. (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. 9. A care full perusal of the aforesaid provision makes it clear that if the AO in the course of any proceedings is satisfied that any person has concealed the particulars of his income or furnished inaccurate particulars of such income, then he may levy the penalty on the assessee. Two different charges i.e., the concealment of particulars of income or furnishing of inaccu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ve noted that in reply to the show cause notice the assessee explained that due to oversight the assessee could not disclosed the bank account. However, the AO while levying penalty not accepted the explanation furnished by assessee. The AO recorded that the assessee has not disclosed the transaction in the bank statement of his proprietory concern. The AO nowhere recorded that the assessee was with some other name or running more than one proprietorship. 13. We noted that the AO, failed to discharge his onus as he was not sure at the initiation of penalty under section 271(1)(c) for which specific charge of penalty has been initiated by the AO. Even while levying the penalty also, the AO simply relied on the Explanation 1to s. 271(1)(c). Therefore, in our opinion, the basis of levy of penalty itself is not correct. 14. The ld AR for the assessee strongly relied on the decision of Tribunal in Wadhwa Estate Developers India Pvt Ltd Vs ACIT (supra), wherein on similar set of fact the coordinate bench passed the following order: 6. We have considered the submissions of the parties and perused the material available on record. Undisputedly, in the return of income a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is placed at Page 17 of the paper book, we have found that Assessing Officer has not specified which limb of the provision contained under section 271(1)(c) is attracted to the assessee. The Hon'ble Supreme Court in Dilip N. Shroff v/s JCIT, [2007] 291 ITR 519 (SC), has observed that while issuing the notice under section 274 r/w section 271, in the standard format, the Assessing Officer should delete the inappropriate words or paragraphs, otherwise, it may indicate that the Assessing Officer himself was not sure as to whether he had proceeded on the basis that the assessee had concealed his income or had furnished inaccurate particulars of income. This, according to the Hon'ble Supreme Court, deprives the assessee of a fair opportunity to explain its stand, thereby, violates the principles of natural justice. As held by the Hon'ble Supreme Court in CIT v/s Reliance Petroproducts Pvt. Ltd. [2010] 322 ITR 158 (SC), the aforesaid principle laid in Dilip N. Shroff (supra) still holds good in spite of the decision of the Hon'ble Supreme Court in UOI v/s Dharmendra Textile Processors (2008) 306 ITR 277 (SC). The Hon'ble Jurisdictional High Court in CIT v/s Smt. Ka ..... 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