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TMI Blog2021 (7) TMI 375X X X X Extracts X X X X X X X X Extracts X X X X ..... he penalty are without application of mind, hence not sustainable. Even otherwise, AO by disallowing the prior period expenses has not taken into account the benefit of amnesty scheme taken by the assessee from the Electricity Department. Even AO has not disputed genuineness of expenses claimed by the assessee rather disallowed the same by taking a different view which does not attract the provisions contained u/s 271(1)(c) - We are of the considered view that initiating penalty u/s 271(1)(c) of the Act on the basis of vague and ambiguous notice is not sustainable in the eyes of law - Decided in favour of assessee. - ITA No.6983/Del./2017 - - - Dated:- 9-7-2021 - Shri R.K. Panda, Accountant Member And Shri Kuldip Singh, Judicial Memb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pect of disallowance of expenses of one of the units of the assessee, M/s. Sushila Steels on the basis that the operations of the said unit had ceased to exist. The penalty for concealment so confirmed by Ld. CIT (A) is unjustified, unwarranted and bad in law. (iv) That the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the penalty u/s 271(1) (c) of the Act in respect of addition on account of surrender of additional income. The penalty for concealment so confirmed by Ld. CIT (A) on this count is unjustified, unwarranted and bad in law. 2. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment framed under section 143 (3) of the Act at the income of ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penses claimed by the assessee has never been disputed by the AO/ld. CIT (A) rather disallowed the same by taking different view. 6. In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower authorities and arguments addressed by the authorized representatives of both the parties, the sole question arises for determination in this case is:- as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings? 7. Ld. AR for the assessee contended that AO has failed to specify in the show-cause notice issued under section 271(1)(c) read with section 274 of the Act if the assessee has filed inaccurate particulars of in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued under sub section (2A) of the Income-tax Act,1961 dated have concealed the particulars of your income or you have furnished inaccurate particulars of such income. You are hereby requested to appear before me at 11.30 AM on 14.01.2012 and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the Income Tax Act, 1961. If you do not wish to avail of this opportunity of being heard in person or through your authorized representatives you may show cause in writing on or before the said date which will be considers before any such order is made under section 271(1)(c). Sd/- (S.K. Yadav) Joint Commissioner of Income-tax, Range-2, Ghaziabad. 9. Bare perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 71 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by revenue, same was liable to be dismissed - Held, yes [Para 2] [In favour of assessee] 11. Hon ble Delhi High Court in case of Pr. CIT vs. Sahara India Life Insurance Company Ltd. (supra) while deciding the identical issue held as under :- 21. The Respondent had challenged the upholding of the penalty imposed under Section 271 (1) (c) of the Act, which was accept ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal :- Therefore, total addition under the above head is comes to the tune of ₹ 6,90,000/-. Since I am satisfied that the assessee has furnished inaccurate particulars of it s income, penalty proceedings under section 271(1)(c) are being initiated separately. 14. When AO has not recorded a valid satisfaction and has also issued invalid notice u/s 271(1)(c) / 274 of the Act, as discussed in the preceding paras, the entire penalty proceedings are vitiated and not sustainable in the eyes of law. Not only this, AO while recording the satisfaction for initiation of penalty proceedings stated that he has furnished inaccurate particulars of income whereas he has levied the penalty for concealment of particulars of income. So, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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