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TMI Blog2021 (6) TMI 932X X X X Extracts X X X X X X X X Extracts X X X X ..... ccurate particulars of such income. We are of the considered 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 its part, the penalty u/s 271(1)(c) of the Act is not sustainable. Recently, the Hon ble Delhi High Court M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] has approved the order of the Hon ble Karnataka High Court in the case of Sahara India Life Insurance [ 2019 (8) TMI 409 - DELHI HIGH COURT] . Respectfully following the judicial precedents as aforementioned, we set aside the order of the Ld. First Appellate Authority and direct the AO del ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e income of the assessee. Penalty proceedings u/s 271(1)(c) of the Act were also initiated and notice u/s 274 dated 22.02.2013 was issued. 2.1 In response to notice issued u/s 274 of the Act, the assessee submitted before the AO that it had finalized its final accounts for the year by making provisions for bad debts as per the provisions of section 36(1)(viia) of the Act. However, at the time of finalization of computation of income due to misunderstanding by the authorized representative, extra deduction was claimed without looking into the contents of the provisions of bad debts provided in the balance sheet and a refund of pre-paid taxes was claimed. It was submitted that as the return of income was filed online, there was no need of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c), levied by the Ld. A.O. of ₹ 1,26,51,285/- 2. That having regard to the facts and circumstances of the case, Ld. CIT (A) has erred in law and on facts in not reversing the action of the Ld. AO in levying penalty u/s 271(1)(c), is bad in law as contrary to the principles of natural justice and has been passed by recording incorrect facts and finding and the same is not sustainable on various legal and factual grounds. 3.0 The Ld. AR has drawn our attention to the notice dated 22nd February, 2013 issued u/s 274 of the Act and it was submitted by him that in this notice, penalty has been proposed to be imposed for having concealed the particulars of income or for furnishing inaccurate particulars of income. It was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e given thoughtful consideration to the orders of the authorities below. The Ld. AR for the assessee has challenged the impugned order contending that the show-cause notice issued by the AO is not a valid notice to initiate the penalty proceedings as the assessee has not been made aware as to whether he has concealed the particulars of income or has furnished inaccurate 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) of the Act, the AO has to prove that there was concealment of particulars of income or that the assessee has furnished inaccurate pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... legal fiction constitute concealment because of deeming provision. g) Even if these conditions do not exist in the assessment order passed, at least, a direction to initiate proceedings under Section 271(l)(c) is a sine qua non for the Assessment Officer to initiate the proceedings because of the deeming provision contained in Section 1(B). h) The said deeming provisions are not applicable to the orders passed by the Commissioner of Appeals and the Commissioner. i) The imposition of penalty is not automatic. j) Imposition 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng of incorrect particulars of income q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. r) The assessee should know the grounds which he has to meet specifically. Otherwise, principle of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. s) Taking up of penalty proceedings on one limb and finding the assessee guilty of another limb is bad in law. t) The penalty proceedings are distinct from the 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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