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TMI Blog2020 (3) TMI 1221X X X X Extracts X X X X X X X X Extracts X X X X ..... 61,whether said penalty proceedings has been initiated for furnishing inaccurate particulars of income or for concealment of particulars of income. Therefore, we are of the considered view that the whole penalty proceedings consequent to vague or invalid notice is void ab initio and liable to be quashed and hence, we quashed penalty order passed by the Ld. AO u/s 271(1)(c) - Decided in favour of assessee. - ITA No.764/Mum/2019 - - - Dated:- 6-3-2020 - Shri G. Manjunatha, Accountant Member And Shri Ravish Sood, Judicial Member For the Assessee : Shri Jitendra Singh, AR For the Revenue : Shri V.Vinod Kumar, DR ORDER PER G.MANJUNATHA (A.M): This appeal filed by the assessee is directed against, the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271(1)(c) of the Act. Thus, the penalty order passed under section 271 (1)(c) of the Act is bad in law and the same may be deleted. 3. Levy of concealment penalty on ad-hoc addition made on account of non genuine purchases unjustified . i. The Ld. CIT(A) erred in confirming the action of the A.O. in levying concealment penalty on the ad-hoc disallowance of ₹ 4,44,885/- being 12.5% of purchases made from 5 parties by treating the same as non genuine relying on the investigation carried on by the Sales Tax Department without appreciating the fact and circumstances of the case. The Appellant, therefore, prays that levy of concealment penalty under section 271(1)(c) of the Act is not at all justified and the same may be delete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ellant craves leave to add, alter, amend, delete or rescind any of the above grounds of appeal mentioned hereinabove. 3. The brief facts of the case are that the assessee is engaged in the business of dealers in fabrics and carpet, filed its return of income for AY 2009-10 on 02/09/2009, declaring total income of ₹ 12,68,790/-. The assessment has been, subsequently reopened u/s 147 of the I.T.Act, 1961 and the assessment has been completed u/s 143(3) r.w.s. 147 of the I.T.Act, 1961 on 25/03/2015, determining the total income at ₹ 20,44,290/- by making additions towards 12.5% profit on alleged bogus purchases from Hawala/suspicious dealers and disallowances of service tax payable u/s 43B of the I.T.Act, 1961. Thereafter, a sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t submissions of the assesse and also by relied upon certain judicial precedents, including the decision of Hon ble Kerala High Court, in the case of CIT vs. K.P.Madhusudanan (2001) 165 CTR 353 observed that the assessee has failed to prove that explanation put forth is bonafide and that all the facts relating to the same and material to the computation of his total income have been disclosed in the return of income so filed. Therefore, he opined that it is a fit case for imposing penalty u/s 271(1)(c) of the I.T.Act, 1961 and accordingly, affirmed penalty levied by the Ld. AO and dismissed, appeal filed by the assessee. Aggrieved by the Ld.CIT(A) order, the assesee is in appeal before us. 5. The Ld. AR for the assessee submitted that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... various judicial precedents, including the decision of Hon ble Supreme Court, in the case of CIT vs M/s. SSA s Emerald Meadows (2016) 242 taxmann.com 180 (SC), held that from the notice issued by the Ld. AO u/s 274 r.w.s. 271(1)(c) of the I.T.Act, 1961 and from the satisfaction recorded during the assessment proceedings, it is not discernable from the records that whether, the penalty proceedings are initiated for concealment of particulars of income or for furnishing inaccurate particulars of income and consequently, the whole penalty proceedings becomes void ab initio and liable to be quashed. The relevant findings of the Tribunal are as under:- 6. We have heard both the parties, perused the materials available on record and gone t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s penalty order , it is very clear from the records that the Ld. AO has not arrived at clear satisfaction as required under the Act, even in assessment order and said lapses is continued in show cause notice issued us 274 r.w.s. 271(1)(c) of the I.T.Act, 1961. Further, even in penalty order, the Ld. AO 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. 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 particul ..... X X X X Extracts X X X X X X X X Extracts X X X X
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