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TMI Blog2022 (5) TMI 514X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 2005-2006. 2. The assessee has raised the following grounds of appeal: 1. The Ld.CIT(A) erred on facts and in law in holding that the penalty was not barred by limitation. 2. The Ld.CIT(A) erred on facts in law in upholding the penalty levied u/s.271(1)(c) of the I.T Act of Rs.7,68,900/- The appellant craves permission to add, alter, amend or withdraw any ground or grounds of appeal either before or during the course of hearing of the appeal. 3. The assessee has challenged the validity of the penalty levied by the AO under the provisions of section 271(1)(c) of the Act on the reasoning that there was no satisfaction/ direction for initiating the penalty recorded by the AO before levying the penalty as provided under the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 for an amount of Rs. 7,68,900.00 being hundred percent of the amount of tax sought to be evaded. 4.3 On appeal, the learned CIT-A confirmed the order of the AO by sustaining the penalty imposed by him (the AO) under the provisions of section 271(1)(c) of the Act. 5. Being aggrieved by the order of the learned CIT-A, the assessee is in appeal before us. 6. The learned AR before us filed a paper book running from pages 1 to 106 and assailed the penalty order passed by the AO which was confirmed by the learned CIT-A. The impugned order was challenged by the assessee on various counts. To this effect, the learned AR filed the written submissions which is available on record. One of the reason for challenging the penalty order by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g: "Issue penalty notice u/s. 274 r.w.s. 271(1)(c) of the I.T. Act for concealment of income and furnishing inaccurate particulars of income." 8.1 From the above finding of the AO, there is no clarity or indication that the penalty was levied for all the additions which were made during the assessment proceedings. Admittedly, there were 4 kinds of additions which are made during the assessment proceedings and the same have been elaborately discussed in the preceding paragraph. Now one can interpret that in the absence of any specific finding of the AO, it can be presumed that notice under section 274 read with section 271(1)(c) of the Act was issued with respect to all the additions/disallowance made by the AO. To our understanding, this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere was no penalty finally levied qua the depreciation disallowance and vehicle insurance expense disallowance. 8.2 Furthermore, the provisions of section 271(1B) of the Act requires the AO to initiate the penalty proceedings in the assessment order which shall be deemed to constitute the satisfaction of the AO. However, the Honourable High Court of Karnataka in the case of Safina Hotels Private Ltd versus CIT reported in 66 Taxman.com 334 states that direction to initiate proceedings under section 271(1B) of the Act should be clear and without any ambiguity. The relevant extract of the order reads as under: 10. As regards Section 271(1-B) of the Act, it clearly indicates that the assessment order should contain a direction for initiatio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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