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TMI Blog2022 (9) TMI 1499X X X X Extracts X X X X X X X X Extracts X X X X ..... its income OR furnished inaccurate particulars of such income, but thereafter imposed the same vide his order passed u/s. 271(1)(c) of the Act, dated nil for both the defaults i.e. concealment of income and furnishing of inaccurate particulars of income, therefore, on the said count too the impugned penalty could not be sustained and is liable to be struck down. We, thus, for the aforesaid reasons not being able to persuade ourselves to subscribe to the imposition of penalty by the A.O, therefore, set-aside the order of the CIT(A) who had not only upheld but in fact enhanced the same. Accordingly, the penalty imposed under Sec. 271(1)(c) - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by ld. Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 on the basis of Show Cause Notice issued under section 274 r.w.s. 271(1)(c) without ascertaining and mentioning the specific charge of default hence the penalty order is bad in law and void ab initio. 2. In the facts and circumstances of the case and in law, the impugned order is illegal and unsustainable as per law laid down in the case of CIT V/ s SSA's Emerald Meadows (73 Taxmann.com 248 SLP dismissed on 05/08/2016). As the assessee by raising the aforesaid additional grounds of appeal sought our indulgence for adjudicating a legal issue which requires looking for facts beyond those available on record, therefore, we admit the same. 3. Succinctly st ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses Rs.40,000/- 5. Aggrieved, the assessee assailed the order passed by the A.O u/s. 271(1)(c) of the Act before the CIT(Appeals), who not only confirmed the penalty imposed by the A.O, but also considering the fact that the assessee's claim for deduction u/s. 36(1)(viii) while disposing off the assessee's quantum appeal declined by him a/w. enhancement of the disallowance of the assessee's claim for deduction of legal expenses as was made by the AO, the CIT(Appeals) enhanced the penalty by an amount of Rs.3,15,850/-.Accordingly, the CIT(Appeals) saddled the assessee with a penalty of Rs. 5,15,850/- u/s. 271(1)(c) of the Act. 6. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claim of deduction u/s. 36(1)(viia) of the Act; and (ii) claim of legal expenses; for concealment of its income OR furnishing of inaccurate particulars of income. It was submitted by the Ld. AR that even otherwise, in the penalty order passed by the A.O u/s. 271(1)(c) dated Nil, the impugned penalty had been imposed by the A.O for furnishing of inaccurate particulars of income AND concealment of income. On the basis of his aforesaid contentions, it was submitted by the Ld. AR that as the A.O had failed to validly put the assessee to notice as regards the nature of default for which penalty u/s. 271(1)(c) of the Act was proposed to be imposed on it, therefore, the penalty imposed by him u/s. 271(1)(c) of the Act could not be sustained and w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng that the assessee had concealed its income OR furnished inaccurate particulars of such income, however, the same, thereafter, was imposed by him vide his order passed u/s. 271(1)(c) of the Act, dated nil for both the defaults i.e. concealment of income and furnishing of inaccurate particulars of income. In our considered view as both the defaults i.e., 'concealment of income' and 'furnishing of inaccurate particulars of income' are separate and distinct defaults which operate in their exclusive fields, therefore, imposition of penalty by the A.O qua the aforesaid solitary addition for both of the aforesaid defaults contemplated in Section 271(1)(c) of the Act cannot not be sustained and is liable to be struck down on the said count itsel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibe to the imposition of penalty by the A.O, therefore, set-aside the order of the CIT(A) who had not only upheld but in fact enhanced the same. Accordingly, the penalty of Rs.5,15,850/-imposed under Sec. 271(1)(c) by the A.O, which thereafter was enhanced by the CIT(Appeals) is quashed in terms of our aforesaid observations. 12. In the result, the appeal of the assessee in ITA No.118/RPR/2017 for the assessment year 2010-11 is allowed in terms of our aforesaid observations. ITA No.116/RPR/2017 A.Y.2008-09 13. As the facts and the issue involved in the present appeal to the extent relevant to the issue of validity of jurisdiction assumed by the AO under Sec. 271(1)(c) of the Act, viz. i) initiation of penalty proceedings under Sec. 271( ..... X X X X Extracts X X X X X X X X Extracts X X X X
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