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TMI Blog2020 (4) TMI 397X X X X Extracts X X X X X X X X Extracts X X X X ..... 0/-, imposed by the Assessing Officer, invoking the provisions of section 271(1)(c) of the Act, 1961. ii. That the Ld. CIT(A) has erred in upholding the penalty of Rs. 4,00,000/- without looking into facts and circumstances of the case and relying on irrelevant judicial pronouncements. iii. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 3. The only issue raised in the present appeal is against the levy of penalty under section 271(1)(c) of the Act. The assessee for the year under consideration, had filed the return of income declaring total income of Rs. 21,62,786/-. The case of the assessee was taken for scrutiny. During the course of examin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g of satisfaction as to which limb of section 271(1)(c) of the Act has not been complied with by the assessee, there was no merit in the aforesaid levy of penalty. He placed reliance on the ratio laid down by the Delhi Bench of the Tribunal in Sunita Agarwal in ITA No.2309/Del/2016, order dated 18/12/2018. 7. The Ld. DR for the Revenue on the other hand, pointed out that once the penalty proceedings have been initiated, there was deemed satisfaction in the case and he referred to the provisions of section 271(1B) of the Act. 8. We have heard the rival contention and perused the record. The issue which is arising the present appeal is against the levy of penalty under section 271(1)(c) of the Act of non-recording of proper satisfaction by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ht to be made, for levy of penalty under section 271(1)(c) of the Act. As referred to by us in the earlier paras and also in this para, we find that there is total non recording of any satisfaction as to which limb of section 271(1)(c) of the Act has not been complied with by the assessee and in the absence of such show cause notice, where the Assessing Officer has not pointed out that the assessee has furnished inaccurate particulars of income or had concealed its income, then no penalty under section 271(1)(c) of the Act can be levied. 10. The learned Departmental Representative for the Revenue has placed reliance on the provisions of section 271(1B) of the Act and pointed out that once penalty proceedings has been initiated, then there ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the same?" 17. The Hon'ble High Court had allowed the claim of assessee where the Assessing Officer had not explicitly mentioned that as to whether the penalty proceedings were initiated for concealment of income or for furnishing inaccurate particulars of income, suffers from infirmity even if it is established that the assessee had concealed the income in the facts and circumstances of the case. The Apex court has dismissed the SLP filed by the Department. Applying the said principle, we hold that even if it is established that the additional income is on account of concealment of income but while recording satisfaction for initiating penalty proceedings, the Assessing Officer should explicitly mentions as to whether penalty is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f proceedings. Further, referring to the provisions of the Act while initiating penalty proceedings, the Court held that following pre-requisites should be there:- "Under section 271(1)(c) to initiate penalty proceedings the following pre-requisites should obtain: (i) The Assessing Officer should be 'satisfied' that : (a) the assessee has either concealed particulars of his income; or (b) furnished inaccurate particulars of his income; or (c) infracted both (a) and (b) above. (ii) This 'satisfaction' should be arrived at during the course of 'any' proceedings. These could be assessment, reassessment or rectification proceedings, but not penalty proceedings. (iii) If ingredients contained in (i) and (ii) are present a notice to show ..... X X X X Extracts X X X X X X X X Extracts X X X X
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