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TMI Blog2021 (8) TMI 1182X X X X Extracts X X X X X X X X Extracts X X X X ..... ue and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. - Decided in favour of assessee. - ITA No.5105/Del./2017, ITA No.5106/Del./2017, ITA No.5107/Del./2017, ITA No.5108/Del./2017, ITA No.5109/Del./2017 - - - Dated:- 25-8-2021 - Shri Anil Chaturvedi, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri P.C. Yadav, Advocate For the Revenue : Ms. Anima Burnwal, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Aforesaid interconnected appeals filed by the assessee challenging the impugned orders passed by the ld. CIT (A) bearing common question of law and facts are being disposed off by way of consolidated order to avoid repetition of discussion. 2. Appellant, M/s. Hitesh Construction Pvt. Ltd. (hereinafter referred to as the assessee ) by filing the present appeals sought to set aside the impugned orders all dated 29.06.2017 passed by the Commissioner of Income - tax (Appeals)-24, New Delhi confirming the penalty orders dated 29.03.2017, 30.03.2017, 29.03.2017, 29.03.2017 29.03.2017 passed under section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... respectively by making addition of ₹ 1,00,000/- on account of disclosure made by the assessee before the Income Tax Settlement Commission. Penalty proceedings have been initiated against the assessee u/s 271(1)(c) of the Act. Declining the contentions raised by the assessee, AO proceeded to levy the penalty to the tune of ₹ 10,14,082/-, ₹ 35,844/-, ₹ 30,900/-, ₹ 30,900/- Rs.,30,900/- for AYs 2008-09, 2009-10, 2010-11, 2011-12 2012-13 respectively @ 100% of the tax sought to be evaded. 4. Assessee carried the matter before the ld. CIT (A) by way of filing appeals who has confirmed the penalty by dismissing the same. Feeling aggrieved, the assessee has come up before the Tribunal by way of filing the present appeals. 5. We have heard the ld. Authorized Representatives of the parties to the appeals, gone through the documents relied upon and orders passed by the Revenue authorities below in the light of the facts and circumstances of the case. 6. By moving a separate application, assessee company sought to raise additional ground on the ground that the same go to the root of the case which is as under :- On the facts and under t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was for ₹ 1,00,000/- each on account of disclosure made before Income Tax Settlement Commission. 10. In order to proceed further, we would like to peruse the identical worded notices issued by AO u/s 274 read with section 271(1)(c) of the Act to initiate the penalty proceedings, available at pages 11 to 15 of the paper book for AYs 2008-09 to 2012-13, and notice issued for AY 2008-09 is extracted for ready perusal as under :- NOTICE UNDER SECTION 274 READ WITH SECTION 271(1)(c) OF THE INCOME TAX ACT, 1961. Date: 20.06.2014 To M.S. HITESH CONSTRUCTION PVT. c-30, PANCHSHEEL ENCLAVE, NEW DELHI-17. Whereas in the course of proceedings before me for the Assessment Year 2008-09 it appears to me that you:- Have without reasonable cause failed to comply with a notice under section 22(4)/23(2) of the Indian Income Tax Act, 1922 or under Section 142(1)/143(2) of the Income Tax Act, 1961 dated .. Have concealed the particulars of your income or furnished inaccurate particulars of such income You are hereby requested to appear before me at Room No.364, 3rd Floor, ARA Centre, Jhandewala ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e to be dismissed - Held, yes [Para 2] [In favour of assessee] 13. 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 accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha 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. 14. Following the decisions rendered in the cases of CIT vs. SSA s Emerala Meadows and Pr. CIT vs. Sahara India Life I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... group who had also filed settlement applications as specified person u/s 245C(i) proviso (i). However, the assessee's application was rejected by the Income Tax Settlement Commission vide their order dated 23.04.2013, wherein the Commission held that the assessee does not qualify for admission as a person related to to the specified person . The assessee filed a writ petition before the Hon ble Delhi High Court, challenging the rejection order of the Settlement Commission, but the petition was dismissed by the Hon ble Delhi High Court on 20.10.2015. Meanwhile, the Assessing Officer passed the assessment order making the following additions over and above the income returned by the assessee: A.Y. Head of addition Amount (IN Rs.) 2008-09 (i) Disclosure in settlement application 30,00,000/- (ii) Unexplained cash credits 1,79,56,880/- (iii) Commission paid to secure unexplained cash credits 5,38,706/- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 01.07.2012 that of Section 271AAB of the Act which was totally ignored by the Assessing Officer. Thus, the penalty itself is based on incorrect Section. Therefore we are taking up the contention of the assessee that there is no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 of the Act. This issue is squarely covered by the decision of the Hon ble Supreme Court in case of M/s SSA Emerald Meadow. The extract of the decision of the Hon ble Karnataka High Court in M/s SSA Emerald Meadows are as under which was confirmed by the Hon ble Apex Court: 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the ITA No. 4913/Del/2015 decision of the Division Bench of this Court rendered in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... No.11485 of 2016 by order dated 5th August, 2016. 22. On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises. Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. 9. Before us, no distinguishing feature in the facts of the case in the year under consideration and that of earlier year has been pointed out by the Revenue. Further it has also not brought on record any material to show that the decision of the Coordinate bench of the Tribunal in assessee s own case for A.Y. 2008-09 has been set aside/ stayed or over ruled by the higher judicial forum. Considering the totality of the aforesaid facts and following the decision of the Co-ordinate bench in the assessee s own case for 2008-09 and for similar reasons, we are of the view that the levy of penalty u/s 271(1)(c) was not justified. We therefore direct its deletion. Thus the grounds of the assessee are allowed. 17. In view of what has been discussed above, we are of the considere ..... 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