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TMI Blog2021 (10) TMI 515X X X X Extracts X X X X X X X X Extracts X X X X ..... er referred to as "appellant", against the order dated 26.02.2018 passed by the Commissioner of Income-tax (Appeals)-30, New Delhi hereinafter referred to as "CIT(A)", against the Penalty order U/s 271(l)(c) of the Income-tax Act, 1961, hereinafter referred to as "Act" passed by the A.C.I.T., Central Circle-32, New Delhi for the Assessment year 2004-05. 1. BECAUSE the learned CIT(A) has erred in law and on facts in upholding the levy of penalty despite the fact that Assessing Officer has not recorded satisfaction as to whether the penalty is initiated for concealment of income or for furnishing inaccurate particulars of income. 2. BECAUSE the learned CIT(A) has erred in law and on facts in sustaining the penalty order particularly whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... olled by Shri S. K. Gupta, during the Financial Year 2003-04 relevant to the Assessment Year 2004-05. Therefore, to reassess the income which escaped assessment within the meaning of Section 147 of the Act, notice u/s 148 of the Act was issued on 30/3/2011. In response to the said notice, the assessee filed its return of income for the Assessment Year 2004-05 on 2/5/2011 declaring total income of Rs. 29,041/-. The assessment in this case was completed u/s 143(3)/153A/147 of the Act on 29/12/2011 at a total income of Rs. 4,51,76,290/-. Penalty proceedings in provisions of Section 271(1)(c) of the Act were initiated. Notice u/s 274 Section 271(1)(c) of the Income Tax Act, 1961 was issued on 29/12/2011. Aggrieved with the additions amounting t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a Cotton & Ginning Factory (2013) 359 ITR 565 (Kar). The Ld AR further submitted that the Hon'ble Delhi High Court in case of Pr. CIT Vs. M/s. Sahara India Life Insurance Company Ltd. (ITA No.475/2019 vide order dated 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. 6. The Ld. DR submitted that the penalty order is very clear that the penalty is imposed on concealment of income and, therefore, merely not mentioning the specific limb of Section 271(1)(c) will not make the penalty order bad in law. The Ld. DR relied upon the Assessment Order, Penalty order and the order of the CIT(A). 7. We have heard both the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... culars 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 GINNING FACTORY (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." Thus, Additional Ground No. (ii) of the assessee's appeal is allowed. Since the inception of the notice issued u/s 271(1)(c) has become null and void, there is no need to comment on merit of the case. The Penalty u/s 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 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. 8. In result, the appeal of the assessee is allowed. Order pro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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