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TMI Blog2021 (4) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer initiated penalty proceedings u/s 271(1)(c) of the Act. Rejecting the various explanations given by the assessee and observing that the assessee has concealed its income to the extent of Rs. 2,47,06,820/- willfully and knowingly by furnishing inaccurate particulars of income, he levied penalty of Rs. 74,12,046/- being 100% of the tax sought to be evaded. 3. In appeal, the learned CIT(A) sustained the addition by observing as under:- "7.1. Non filing of complete details/information amounts to suppression of material facts. Order of CIT(A) reflects facts which are different from the statement of facts filed by the appellant. Finding of facts by CIT(A) has not yet been reversed by ITAT. The case laws relied upon by the appellant, do not hold that penalty is not leviable even when there is suppression of material facts. Therefore, the addition made falls under the definition of deemed concealment under explanation 1 to section 271(1)(c) of the I.T. Act. 1961. Therefore, the penalty levied is confirmed." 4. Aggrieved with such order of the learned CIT(A), the assessee is in appeal before the Tribunal by raising following grounds of appeal:- 1. That the CIT(A) has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rnishing of inaccurate particulars of income. Referring to the copy of the assessment order, he submitted that the Assessing Officer is silent on particular limb of default attributable to the assessee. The order doesn't indicate any specific default of sec 271(1)(c) attributed to the assessee although there is general satisfaction of initiation of penalty proceedings in para 3.1 thereof. Referring to the copy to penalty order, he submitted that the Assessing Officer while levying penalty records satisfaction that the assessee knowingly and willfully by furnishing inaccurate particulars of income concealed its income. He submitted that from the satisfaction in penalty order, there cannot be any dispute that the assessee is in default for furnishing of inaccurate particulars of income and no default for concealing the particulars of income is attributable to the assessee, although, the Assessing Officer finds that this default has resulted into concealment of income. He submitted that invoking of the Explanation of section 271(1)(c) across the board further shows non-application of mind by the Assessing Officer. Referring to the various decision including the decision of the Hon'bl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that where it is mentioned that penalty proceedings u/s 271(1)(c) of the Act are intiated separately, it is held that the same doesn't comply with the word 'direction' as contemplated under section 271(1)(c) of the Act. 7. The learned counsel for the assessee submitted that penalty has been levied for concealment of particulars of income of Rs. 2,47,06,820/- for which addition has been made u/s 68 of the Act. Referring to para-3 of the assessment order, he submitted that the Assessing Officer simply relies on the finding given in the assessment order for AY 2008-09. This shows that the Assessing Officer has not conducted any enquiry to verify the evidences furnished by the assessee in support of the cash credit of Rs. 2,47,06,820/- for this year. Thus, the addition is not based on the rejection of the evidences furnished after due enquiry by the Assessing Officer. Therefore, such addition is not tenable in law in view of the following decisions:- i. CIT vs. Goel Sons Golden Estate Pvt Ltd. ITA 212/2012 (Del); ii. Pr. CIT Vs Laxman Industrial Resources Ltd in 397 ITR 106 (Del); iii. Pr. CIT vs. Green Valley Plywood Limited (ITA No. 358/2016 (Del); iv. Pr. CIT vs Ra ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book filed on behalf of the assessee. We find that the Assessing Officer in the instant case levied penalty of Rs. 74,12,046/- being 100% of tax sought to be evaded on the ground that the assessee has concealed its income to the tune of Rs. 2,47,06,820/- willingly and knowingly by furnishing inaccurate particulars of income. We find that the learned CIT(A) upheld the penalty so levied by the Assessing Officer, reasons of which have already been reproduced in the preceding paragraphs. It is the submission of the learned counsel for the assessee that since the inappropriate words in the said notice has not been struck of, therefore, it is not clear as to under which limb the penalty u/s 271(1)(c) has been initiated. A perusal of the notice issued u/s 274 r.w.s. 271 issued by the Assessing Officer shows that the Assessing Officer has simply put a tick mark against "have concealed the particulars of income or furnished inaccurate particulars of such income in terms of Explanation 1,2,3,4 and 5". A perusal of the assessment order shows that penalty has been initiated in general terms and the assessment order is not clear as to under which limb of the penalty i.e. for concealment of inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows (2016) 73 Taxman.com 241 (Kar) , the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 of2016 by order dated 5th August, 2016." 12. Following the decisions rendered in the cases of CIT vs. Manjunatha Cotton and Ginning Factory, CIT vs. SSA's Emerald Meadows and Pr. CIT vs. Sahara India Life Insurance Company Ltd. (supra), the Co-ordinate Benches of the Tribunal are taking the consistent view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act the penalty notice has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. 13. Respectfully following the decisions cited above, w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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