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TMI Blog2022 (5) TMI 857X X X X Extracts X X X X X X X X Extracts X X X X ..... tandard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. The penalty provisions of section 271(1)(c) of the Act are attracted, where the Assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meanings. Therefore, it is imperative for the Assessing Officer to specify the relevant limb so as to make the Assessee aware, what is the charge made against him so that he can respond accordingly. In the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s 14A of the Act, hence on merit as well the penalty under challenge is not sustainable - Decided in favour of assessee. - ITA No. 2625/Del/2019 - - - Dated:- 17-5-2022 - Shri Pradip Kumar Kedia, Accountant Member And Shri N. K. Choudhry, Judicial Member For the Assessee : Shri R. S. Singhavi, CA For the Revenue : Shri T. Kipgen, Ld. CIT DR ORDER PER N.K. CHOUDHRY, J. M.: 1. This appeal has been preferred by the Assessee against the order dated 14.01.2019 impugned herein passed by the ld. Commissioner of Income Tax (Appeals) 28, New Delhi {in short ld. Commissioner } u/s 250(6) of the Income Tax Act, 1961 (in short the Act ) for the assessment year 2014-15. 2. Brief facts, relevant for adjudication of this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... im of the Assessee and supported the orders passed by the authorities below and submitted that impugned order under challenge does not suffer from any perversity, impropriety and/or illegality and hence needs no interference. 5. Having heard the parties at length and perused the material available on record. The Assessee has claimed 48,53,671/- under the head business promotion expenses which was disallowed by the AO. The said addition resulted into imposition of penalty by the AO and affirmation by the Ld. Commissioner. The Assessee has challenged the penalty order on various grounds including on the basis of notice issued u/s 274 of the Act as well, which is legal in nature, therefore we deem it appropriate first to decide the legal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal was justified in law in. holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is bad in law and. invalid inspite the amendment of Section 271(1 B) with retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued, under Section 274 without taking into consideration the assessment order when the assessing officer has specified that the assessee has concealed particulars of income? 3. The Tribunal has allowed the appeal filed by the Assessee holding the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ind. 5.4 Even the Hon ble High Court of Delhi in the case of M/s. Sahara India Life Insurance Company Ltd. 432 ITR 84 (Del.) while following the cases referred above, 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(l)(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 h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been issued in a stereotyped manner without applying mind which is bad in law, hence can not be considered a valid notices sufficient to impose penalty u/s 271(1)(c) of the Act and therefore we are of the considered view that under these circumstances, the levy of penalty is not justifiable. 5.7 Coming to the merits of this case, the AO did not find the claim of the Assessee as maintainable and made the addition and consequently imposed the penalty which stands affirmed by the ld. Commissioner. It is not the case of the Revenue that the Assessee has acted deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation and therefore mere making of a claim, which is not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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