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TMI Blog2020 (10) TMI 785X X X X Extracts X X X X X X X X Extracts X X X X ..... KARNATAKA HIGH COURT] - Decided in favour of assessee. - ITA No.5795/Del/2016 - - - Dated:- 12-6-2020 - Shri Sudhanshu Srivastava, Judicial Member And Shri Prashant Maharishi, Accountant Member For the Appellant : Sh. Dhani Ram Sharma, CA For the Respondent : Sh. S.N. Meena, Sr. DR ORDER PER SUDHANSHU SRIVASTAVA, JM: This appeal is preferred by the assessee against order dated 05.09.2016 passed by the Learned Commissioner of Income Tax (Appeals)-35, New Delhi {CIT(A)} for Assessment Year 2009-10, wherein vide the impugned order, the Ld. First Appellate Authority has upheld the imposition of penalty of ₹ 15,22,754/- imposed u/s 271(1)(c) of the Income tax Act, 1961 (hereinafter called the Act). 2.0 Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., ₹ 49,28,006/-. The assessee was also required to explain how there was no profit no loss in the trading activity. It was submitted by the assessee before the Assessing Officer that earlier the assessee had decided to enter into trading in fabrics, but later on it was decided to close the trading business in August, 2008 itself and to concentrate on infrastructure projects only and, therefore, the goods purchased earlier were disposed of at cost itself. Accordingly, there was no profit, no loss. The Assessing Officer did not accept this explanation of the assessee and held that the transaction of sale was nothing but a device to introduce unexplained cash in the books of the assessee. Accordingly, an addition of ₹ 49,28,00 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal in nature. It was submitted that the additional ground be admitted as it went into the very root of the matter challenging the legality of imposition of the penalty. The additional ground reads as under: That the Assessing Officer erred on facts and in law in levying penalty of ₹ 15,22,754/- on account of sales consideration without specifying the charge whether the penalty is for inaccurate particular of income or concealment of income in the assessment order under section 143(3) wherein the penalty was initiated nor in the show cause notice under section 274 of the Act and consequently the impugned penalty order passed pursuant to defective initiation is without jurisdiction and is bad in law. 3.1 The Ld. Authoriz ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ea for admitting the additional ground of appeal and it is our considered opinion that since the additional ground raises an important legal issue which challenges the very foundation of the initiation of penalty proceedings, the same deserves to be admitted. Accordingly, we admit the additional ground and proceed to adjudicate the same. 5.1 It is evident from the notice u/s 274 r.w.s. 271 of the Act for the impugned year that the Assessing Officer has not specifically mentioned as to under which limb of Section 271(l)(c) of the Act the penalty proceedings had been initiated by him, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Hon ble High Court of Karnataka in the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d despite the amendment of Section 271 (1 B) with retrospective effect and by virtue of the amendment, the assessing off icer has initiated the penal ty by properly recording the satisfaction for the same ? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the 'assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal f iled by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(l)(c) of the Income Tax Act. 1961 for sho ..... X X X X Extracts X X X X X X X X Extracts X X X X
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