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TMI Blog2024 (8) TMI 336X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT vs. M/s Manjunatha Cotton Ginning Factory Ors.[ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] held that sending printed form where all the grounds mentioned in S. 271 would not satisfy the requirement of law. The assessee should know the ground which he has to meet specifically, otherwise, the principle of natural justice is offended on the basis of such proceedings, no penalty could be could be. We hold that the notices issued u/s 274 r.w.s. 271(1)(c) is not valid and the same is quashed. Decided in favour of assessee. - SHRI SANDEEP GOSAIN, JM DR MITHA LAL MEENA, AM For the Appellant : Shri Devang Garvieya, Advocate For the Respondent : Shri Anoop Singh, Addl CIT-DR ORDER PER: SANDEEP GOSAIN, JM This appeal filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ks of accounts of the assessee u/s. 145(3) of the Act and had made addition of Rs. 1,80,80,961/- to the total income on the impugned issue. In this regard the decision of learned CIT(A) dated 11/01/2019 for A.Y. 2015-16 has perused and the relevant portion is quoted below: However, it is also observed that in this case, the AO has noticed certain shortcomings in the accounts and pointed them out to the assessee. Based on the replies, it can be contended that the assessee was not able to detail variety based pricing or justify clearly the other deficiencies in maintaining proper details of purchases vis a vis raw material consumption, rates of materials, valuation of closing stock, wastages and shortage losses and direct and indirect expense ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable to the instant case. As regards other years, the relevant details to establish that no penalty was imposed by the AO in these years have not been furnished. However, every year is a separate proceeding and moreover the addition made / sustained by the learned CIT(A) points out to a discrepancy of a substantial amount of Rs. 40,84,751/- unlike other years. The appellant has not been able to establish reasonable cause for such failure as required u/s 273B of the I.T. Act. In such circumstances, the grounds of appeal disputing the imposition of penalty by the AO are dismissed. As a result, the appeal is dismissed. 6. As a result, the appeal of the appellant is dismissed. 2.2 During the course of hearing the ld. AR of the assessee has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is aspect of the matter. From the findings recorded by the ld. CIT(A) in the quantum appeal order dt.11.01.2019 and considered by him in the penalty order that the AO made the trading addition of Rs. 1.80 Cr by applying his G.P. rate of 4.50% which was reduced by the ld. CIT(A) to G.P. rate of 3.82% as against the declared 3.62%. Accordingly, trading addition was partly sustained at Rs. 40,84,751/- and the balance addition Rs. 1,39,96,209/- was deleted. These facts clearly show that the addition was made and sustained only on estimate basis. There is no positive fact finding has been recorded to support the contention of the penalty u/s 271(1)(c) of the IT Act. We find support from the decisions of the Hon ble jurisdictional High court in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty u/s 158BFA(2) may not be imposed Assessee s contention that alleged undisclosed income of was purely on basis of estimation and no such documents or evidence to this effect was found during the course of search Imposition of penalty by AO CIT(A) deleted the penalty Held, It was found that addition made on estimate basis Therefore, fact or allegation based on estimation, not correct Penalty was wrongly imposed by AO Penalty not leviable, hence deleted Revenue appeal rejected The ld. CIT(A) while confirming the penalty stated that addition was made on the basis of several discrepancies pointed out in the accounts by the AO and therefore it was not a case of the estimated addition as claimed by the assessee. He also held that the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch he is satisfied that penalty proceedings are attracted and this satisfaction should be made known to the assessee through the SCN u/s 274. For one single item of income being the estimated trading addition, legally there cannot be a charge viz. concealment of income as also of furnishing of inaccurate particulars. This does not meet with the requirement of law. The Hon ble Karnataka High Court in the case of CIT vs. M/s Manjunatha Cotton Ginning Factory Ors. (2013) 359 ITR 565 (Karn) held that sending printed form where all the grounds mentioned in S. 271 would not satisfy the requirement of law. The assessee should know the ground which he has to meet specifically, otherwise, the principle of natural justice is offended on the basis of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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