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TMI Blog2022 (6) TMI 746X X X X Extracts X X X X X X X X Extracts X X X X ..... 74 r.w.s. 271(1)(c) of the Act was defective as it was not clear as which limb the penalty was levied. Reliance in this regard can be placed on the judgment of Hon ble Bombay High Court in Commissioner of Income Tax -11 vs. Shri Samson Perinchery [ 2017 (1) TMI 1292 - BOMBAY HIGH COURT] - Thus, the ground raised by the assessee by virtue of Rule 27 of the Rules 1963 are sustained and the notice dated 25.02.2013 is held to be invalid and the penalty proceedings order dated 09.02.2015 is set aside. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... een disallowed in the previous three assessment years being 2007-08, 2008-09 & 2009-10 by Ld. CIT(A) IX, New Delhi. 2.1 During the assessment proceeding, the assessee had claimed an amount of Rs. 18,08,26,334/- as interest expense. The assessee was asked to explain as to why the amount of interest be not disallowed. The assessee vide its letter dated 23/01/2013 furnished reply. Subsequently to the letter dated 23/01/2013, the assessee furnished another letter dated 13/02/2013, withdrawing its claim of interest of Rs. 18,08,26,334/- as claimed in the return of income for the A.Y. 2010-11 .However in letter 13/02/2013 the assessee had itself withdrawn the claim of interest amounting to Rs. 18,08,26,334/- for the A.Y. 2010-11 by furnishing re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssing officer relied on the decision of CIT v. Zoom Communications Pvt. Ltd.: 327 ITR 51 (Del.).The facts in the case of Zoom Communications were completely different inasmuch as the claims, inter-alia, deduction of income tax paid/ equipment's written off made by the assessee were patently erroneous and had no footings to stand at all. The facts of that case cannot be compared with the present case. The said decision has also been dealt/ distinguished in the following case laws rendered by the jurisdictional Delhi High Court: -Karan Raghav Exports (P) Ltd. v. CIT: 349 ITR 112 -Kanchenjunga Advertising (P) Ltd. v. CIT: 340 ITR 595 - CIT v. Societex: 259 CTR 325 - CIT v. Kas Movie (P) Ltd.: 207 Taxman 183 - CIT v. Madhushree Gu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271(1)(c) of the Act by ignoring the fact that the assessee had made patently wrong claim of deduction of interest by deliberately changing the character of interest payment to create a legal facade that it was disputed issue? 4. Whether in the facts and circumstances of the case, the Ld. CIT(A) is legally justified in deleting penalty only on the ground that there was difference in opinion between the appellate authority with respect to a part of disallowance leading to penalty even when the assessee had failed to discharge its onus as stipulated in explanation 1 to u/s 271(1)(c) of the Act? 5. Whether in facts and circumstances of the case, Ld. CIT(A) is legally justified in allowing relief to the assessee on the basis of earlier ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. That the penalty order passed u/s 271(l)(c) dated 09.02.2015 is illegal, bad in law and without jurisdiction as initiation of penalty by itself if bad in law and without jurisdiction. 5.1 Ld. Counsel relied following judgments to contend that assessee has a right to raise grounds touching the merits of the case. The same could not be disputed by Revenue :- "1. DCIT vs. M/s. Casby Logistics Pvt. Ltd. , ITA No. 1949 & 1950/MUM/2016 (ITAT Mumbai) 2. ITO vs. Smt. Gurinder Kaur , [2006] 102 ITD 189 (ITAT Delhi) 3. Hukumchand Mills Ltd. Vs. CIT [1967] 63 ITR 232 (SC) 4. DCIT Vs. Metro Tyres Pvt. Ltd., ITA No. 2873/Del/2016" 6. It is submitted on behalf of the assessee that the ld. CIT(A) has failed to appreciate that the notice dat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd accordingly levied the penalty. 8. Giving thoughtful consideration to the matter on record in regard to the grounds raised by the assessee by virtue of Rule 27 of the Rules of 1963 it can be observed the Ld. CIT(A) has tried to square up the claim of assessee on the basis that directions to initiate penalty proceedings in the assessment order is a sufficient compliance of recording of satisfaction in terms Section 271(1)(c) of the Act. However, what transpires from record is that in the assessment order, the Ld. AO had concluded the assessment order by following observations in para no. 9 :- "9. Assessed at Income of Rs. 3,74,62,030/-. Credit for prepaid taxes is given. Requisite documents are issued. Interest is charged u/s 234A, 234 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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