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TMI Blog2021 (9) TMI 1225X X X X Extracts X X X X X X X X Extracts X X X X ..... on which was a bonafide mistake on part of the assessee for which it cannot be said that it is concealment of income or furnishing of inaccurate particular of income. This issue is squarely covered by the decision of the Hon ble Supreme Court in case of M/s SSA Emerald Meadow.[ 2016 (8) TMI 1145 - SC ORDER] . As the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. - Decided in favour of assessee. - I.T.A. No.7086/DEL/2017 - - - Dated:- 28-9-2021 - MS SUCHITRA KAMBLE, JUDICIAL ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mistake. 3. The assessee company is engaged in the business of manufacturing and exports of readymade garments, job work and trading in fabric etc. The return of Income was filed on 30/09/2013 at the income of ₹ 92,01,530/-. The Assessing Officer passed assessment order u/s 143(3) dated 23/03/2016 and assessed total income at ₹ 1,05,90,130/- by making disallowance of depreciation amounting to ₹ 13,88,600/-. Subsequent to the passing of the order u/s 143(3) dated 23/03/2016, the Assessing Officer has initiated penalty proceedings and passed the penalty order u/s 271(l)(c) dated 29.09.2016 and imposed penalty amounting to ₹ 4,50,530. 4. Being aggrieved by the penalty order, the assessee filed appeal before the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed 02.08.2019) held that notice issued by the Assessing Officer would be bad in law if it did not specify which limb of Section 271(1)(c) of the penalty proceedings had been initiated. The Ld. AR further submitted that the wrong claim of depreciation cannot be held to have been claimed with an intention to suppress the facts or evade tax as the books of accounts of the assessee company was audited u/s 44AB of the Act. In fact, the tax auditor of the assessee company has not made any adverse remarks in respect of claim of depreciation including the claim of ₹ 13,88,600/- on rented property on which the assessee claimed standard deduction u/s 24(b) of the Act. It s a bonafide mistake and hence no appeal was filed against the said disall ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Delhi High Court 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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