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TMI Blog2020 (7) TMI 127X X X X Extracts X X X X X X X X Extracts X X X X ..... view that when the assessee has not been specifically made aware of the charges leveled against it as to whether there is a concealment of income or furnishing of inaccurate particulars of income on his part, the penalty u/s 271(1)(c) of the Act is not sustainable. - Decided in favour of assessee. - ITA No.3099/Del/2019 - - - Dated:- 30-6-2020 - Shri Sudhanshu Srivastava, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Sh. Gautam Jain, Adv. For the Respondent : Sh. Jagdish Singh, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER: This appeal is preferred by the assessee against order dated 27.02.2019 passed by the Ld. Commissioner of Income Tax (Appeals)-22, New Delhi {C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ompany @ 6%. The Assessing officer proceeded to restrict the interest expenditure claimed to 5% from 15% as claimed by the assessee. The assessee s quantum appeal before the ITAT was also dismissed vide order dated 06.12.2016 in ITA No.2746/Del/2014. 2.2 Subsequently penalty of ₹ 18,79,644/- was imposed u/s 271(1)(c) on this interest disallowance. The assessee s appeal against the imposition of penalty before the Ld. CIT (A) was also dismissed. Now the assessee is before this Tribunal challenging the confirmation of penalty by raising the grounds of appeal: 1. That the learned Commissioner of Income Tax (Appeals)-22, New Delhi has erred both in law and on facts in upholding penalty of ₹ 18,79,644/- in an order dated 27.2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olly unjustified. 8. It is therefore prayed that the penalty levied of ₹ 18,79,640/- u/s 271(1)(c) of the Act and sustained by the Learned Commissioner of Income Tax (Appeals) may kindly be deleted. 3.0 At the outset, the Ld. Authorized Representative (AR) drew our attention to the notice issued u/s 274 r.w.s 271(1)(c) of the Act and submitted that the notices placed at pages 85-86 of the Paper Book were highly vague in as much as they did not state to whether the assesee had concealed the particulars of income or had furnished inaccurate particulars of income. It was also submitted that the penalty order was vague and non specific as there was no specific charge in the penalty order specifying that the assessee had conceale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars of such income . It is settled principle of law that penalty cannot be imposed merely on the ground that additions made in the income of the assessee have been confirmed. Rather to proceed with the imposition of penalty u/s 271(1)(c), the AO has to prove that there was concealment of particulars of income or that the assessee has furnished inaccurate particulars of such income. 5.1 A bare perusal of the notices issued to the assessee u/s 274 read with section 271(1)(c) of the Act goes to prove that assessee has not been called upon to explain if it has concealed the particulars of income or furnished inaccurate particulars of such income. The Hon ble Karnataka High Court in case of CIT vs. Manjunatha Cotton and Ginning ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition of penalty even if the tax liability is admitted is not automatic. k) Even if the assessee has not challenged the order of assessment levying tax and interest and has paid tax and interest that by itself would not be sufficient for the authorities either to initiate penalty proceedings or impose penalty, unless it is discernible from the assessment order that, it is on account of such unearthing or enquiry concluded by authorities it has resulted in payment of such tax or such tax liability came to be admitted and if not it would have escaped from tax net and as opined by the assessing officer in the assessment order. l) Only when no explanation is offered or the explanation offered is found to be false or when the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment proceedings. The proceedings for imposition of penalty though emanate from proceedings of assessment, it is independent and separate aspect of the proceedings. u) The findings recorded in the assessment proceedings in so far as concealment of income and furnishing of incorrect particulars would not operate as res judicata in the penalty proceedings. It is open to the assessee to contest the said proceedings on merits. However, the validity of the assessment or reassessment in pursuance of which penalty is levied, cannot be the subject matter of penalty proceedings. The assessment or reassessment cannot be declared as invalid in the penalty proceedings. 5.2 Therefore, following the law laid down by the Hon ble High ..... X X X X Extracts X X X X X X X X Extracts X X X X
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