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TMI Blog2023 (11) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... 017. 2. Grounds of appeal raised by the assessee are as follows: "1. On the facts and circumstances of the case as well as law on the subject, the learned assessing officer has erred in levying penalty u/s 271(1)(c) when assessing office had not specified in the notice u/s 274 r.w.s. 271(1)(c) whether the penalty was leviable for concealment of particulars income or for furnishing inaccurate particulars thereof. 2. On the facts and circumstances of the case as well as law on the subject, the learned CIT(A) has erred in confirming the action of Assessing Office in levying penalty of Rs. 3,09,062/- u/s 271(1)(c) of the I.T. Act, 1961. 3. It is therefore prayed that penalty levied by the assessing office and confirmed by CIT(A) may plea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 4. Later on, the Assessing Officer has also initiated penalty proceedings u/s 271(1)(c) of the Act, on the above addition. Therefore, a show cause notice u/s 274 r.w.s. 271(1)(c) of the Act, was issued on 17.12.2016 and sent along with the assessment order for giving an opportunity of hearing. Further, during the penalty proceedings, the assessing officer noted that the assessee has not preferred appeal against the above addition. Therefore, before completing the penalty proceedings one more opportunity of being heard was given and hearing was fixed on 27.02.2017 requesting to explain as to why penalty u/s 271(1)(c) of the Act should not be levied. In response to the above show cause, the assessee has not filed submission. For the details ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income' or 'furnishing inaccurate particulars of income'. Therefore Ld. Counsel contended that without invoking Explanation-1 of Section 271(1)(c) of the Act, the penalty should not have been levied on both the limbs. For that, Ld. Counsel relied on the judgment of Hon'ble Supreme Corut in the case of CIT vs. M/s SSA'S Emerald Meadows in SLP CCNo.11485/2016 dated 05.08.2016 and also relied on the judgment of Hon'ble Bombay High Court in the case of Ganga Iron & Steel Trading Co. vs. CIT [2022] 135 taxmann.com 244 (Bom). 8. On the other hand, Learned Sr.DR for the Revenue supported the penalty order passed by the Assessing Officer and argued that penalty was initiated by the Assessing Officer on two limbs, viz: "concealment of income" or " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 005, the appeals in ITA's No.2141/Ahd/2013 & 2142/Ahd/2013 will become infructuous. 8. On merit, the Ld.AR of the assessee submits that the Assessing Officer (AO) while passing the assessment order rejected the books of accounts of assessee and estimated the Gross Profit (GP) @ 10% of turnover. On appeal before the ld. CIT(A), the addition was upheld. However, on further appeal before the Tribunal the addition was restricted to GP @ 5% of Gross Profit for both the assessment years vide order dated 08.03.2004 in ITA(s) No.186 & 187/Ahd/1998. The copy of order of the Tribunal is placed on record. In the aforesaid background, the Ld. AR for the assessee submits that it is settled law that no penalty is leviable on addition made on estimated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e while filing return of income for assessment year 1988-89 on 20.06.1988 declared loss in the form unabsorbed depreciation of Rs. 22,48,941/-. The assessment was completed under section 143(3) on 29.05.1992. The assessing officer while passing the assessment order assessed total income of the assessee at Rs. Nil and also allowed carry forward of unabsorbed depreciation. It is an admitted fact that the assessing officer while passing the assessment order rejected the books of accounts and estimated the gross profit @10% turnover by passing the flowing order: "The assessee failed to produce books of accounts from which the g.p. position can be verified. The assessee does not maintain quantitative tally stock as is evident from the report o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade estimated addition of Rs. 10 lakh, whereas in the penalty order, Assessing Officer levied the penalty only on Rs. 5,45,000/- vide para no.6 of penalty order. Therefore Ld. Counsel argued that the Assessing Officer made addition, on estimated basis, to the tune of Rs. 10 lakh, however, in the penalty order dated 02.06.2017, the said amount was further estimated to the tune of Rs. 5,45,000/-. Therefore, Assessing Office has further estimated the income of assessee during the penalty proceedings, and hence Ld. Counsel contended that the penalty on estimation should not be imposed. Hence, it is abundantly clear that penalty u/s 271(1)(c) of the Act, was imposed on estimated addition. Therefore, respectfully following the binding judgment of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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