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TMI Blog2023 (7) TMI 854X X X X Extracts X X X X X X X X Extracts X X X X ..... which he has to meet Otherwise, the principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. Penalty proceedings are distinct from assessment proceedings, though it emanates from the assessment proceedings; still it is separate and independent proceedings all together. When the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act the penalty notice has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. Decided in favour of assessee. - ITA No. 2911/Del/2019 - - - Dated:- 19-7-2023 - Sh. N.K.Billaiya, Accountant Member And Sh. Anubhav Sharma, Judicial Member ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d undue litigation and harassment, vide his above stated letter, offered that the loss of the company may be reduced and assessed at NIL. After considering all the facts and circumstances of the case and after the perusal of the above submission filed by the A.R., the income of the assessee company is assessed at NIL. Penalty proceedings u/s 271(1)(c) is being initiated separately for concealment of income. 3. Subsequently, notices were issued to the assessee initiating penalty proceedings u/s 271(1)(c) of the Act for concealment of income and the impugned penalty order was passed which has been sustained by Ld. CIT(A) and the assessee is in appeal raising following grounds :- 1. The order passed by the Learned Commissioner of Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of law and judicial precedents. The impugned order has been passed by the Ld. CIT(A) in utter ignorance of the principles of judicial discipline. 7. The above grounds of appeals are independent and without prejudice to one another. 8. The appellant may be allowed to add/ withdraw or amend any ground of appeal at the time of hearing. 4. Heard and perused the record. 5. Ld. Counsel of appellant submitted that the whole penalty proceedings are vitiated as at one end Ld. AO failed to give any findings with regard to any concealment of income while passing the assessment order and at the same time the notices issued were ambiguous with regard to the limb under which they were issued u/s 271(1)(c) of the Act. It was also submitt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the Act so as to act as estoppels upon Ld. AO. In any case, if Ld. AO was not accepting the conditional plea then assessee should have been show caused for the same in assessment proceedings. At the same time it comes up that there is no substance in the form of enquiry and evidence that there was a concealment of income. No such observations were made at the time of assessment order. Then at the time of penalty proceedings also factual analysis of the claim of loss was not made but Ld. AO has drawn inferences from the act of assessee to have made the plea to get assessed at NIL 8. Further, Ld. Counsel for the assessee has cited that the notices issued, the copy of which are available in the paper book at page no. 168 and 197 do n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (c) of the Act was bad in law, as it did not specify under which limb of section 271(1)(c) of the Act, penalty proceedings has been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. When the matter travelled upto the High Court, it supported the judgment of the Hon ble Karnataka High Court in the case of CIT and Another vs. Manjunath Cotton Ginning Factry (supra) and decided that there was, therefore, no substantial question of law to be decided. Thereafter, an SLP was filed before the Hon ble Apex Court and the Apex Court dismissed the SLP of the Revenue finding no merit therein and confirming the issue in favour of the assessee. 9.1 In CIT and Another vs. Manjuna ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19 order dated 20.08.2019 while deciding the identical issue 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 Emeral ..... X X X X Extracts X X X X X X X X Extracts X X X X
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