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TMI Blog2020 (1) TMI 1176X X X X Extracts X X X X X X X X Extracts X X X X ..... has not arrived at clear satisfaction, which is evident from the fact that he has concluded his penalty proceedings and levied penalty u/s 271(1)(c) on both limbs. See M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] From the above, it is very clear that the satisfaction required to be recorded before initiation of penalty proceedings u/s 271(1)(c) is not discernable, whether the penalty proceedings are initiated for concealment of particulars of income or furnishing of inaccurate particulars of income, either in assessment order or in the show cause notice issued for levying penalty. Therefore, we are of the considered view that the penalty proceedings initiated u/s 271(1)(c) i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issued under section 274 r.w.s 271 of the Act and the subsequent penalty order passed under section 271(l)(c) of the Ac! are bad in law and the same may be quashed. ii. The penalty order dated 31.03.2017 passed under section 271(1)(c) of the Act is bad in law as the penalty has been levied on the basis of both the limbs which is not permissible as per the provisions of section 271(1)(c) of the Act, Thus, the penalty order passed under section 271(l)fc) of the Act is bad in law and the same may be deleted. Levy of concealment penalty on denial of set off of business loss against salary income unjustified - ₹ 2,73,256/- i. The Ld. CIT(A) erred in confirming the action of the A.O. in levying concealment penalty of ₹ 2,73,25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vy of concealment penalty of R.s.2,73,256/- is unjustified and the same may be deleted. 4. The Appellant craves leave to add, alter, rescind or amend any of the above grounds of appeal. 3. The brief facts of the case are that the assessee has filed its return of income for the AY 2009-10 on 30/07/2009, declaring total income at ₹ 43,90,280/-. The assessment has been completed u/s 143(3) of the I.T.Act, 1961 on 25/11/2011, determining the total income at ₹ 48,05,570/- after making disallowances of brought forward business loss against income under the head income from salary. Thereafter, the Ld. AO has initiated penalty proceedings u/s 271(1)(c) of the I.T.Act, 1961 and after considering relevant submissions of the assesse lev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n in the notice. From this, it is very clear that the satisfaction of the Ld. AO is not discernable, whether the penalty proceedings are initiated for concealment of income or furnishing of inaccurate particulars of income. Further, even in penalty order, the Ld. AO has clearly not specified about the limb under which penalty is proposed to be levied, which is evident from the fact that the Ld. AO has clearly stated that the assessee has concealed his income and submitted inaccurate particulars of income. Any penalty proceedings initiated consequent to invalid notice is void ab-initio and consequently, the penalty levied u/s 271(1)(c) of the I.T.Act, 1961 cannot be sustained. 5. The Ld. DR, on the other hand, strongly supporting order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ied for different limb, then the whole penalty proceedings, becomes invalid and void ab-initio. This legal proposition is supported by the decision of Hon'ble e Bombay High Court, in the case of CIT vs Samson Perinchery in ITA No. 1154/Mum/2015, dated 05/12/2017. This legal proposition is further supported by the decision of Hon'ble Supreme court, in the case of CIT vs M/s SSA's Emerald Meadows (2016) 242 Taxmann 180 (SC), where the Hon'ble Supreme court has upheld the decision of Hon'ble Karnataka High Court, in the case of CIT vs. Manjunatha cotton & Ginning Factory (2013) 359 ITR 565. In this case, on perusal of assessment order, as well as penalty order , it is very clear from the records that the Ld. AO has not arrived at clear satisfa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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