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TMI Blog2024 (8) TMI 686X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act. It is held in many judicial precedents that the penalty notice must clearly specify whether it is for concealment of income or furnishing inaccurate particulars. A vague notice vitiates the penalty proceedings. Decided in favour of assessee. - Ms. Suchitra Kamble, Judicial Member And Shri Makarand V. Mahadeokar, Accountant Member For the Assessee : Shri Ashish Kanabar, AR For the Revenue : Shri Ashok Natha Bhalekar, Sr.DR ORDER PER SHRI MAKARAND V. MAHADEOKAR, AM: This appeal is filed by the Assessee as against the order dated 08/07/2019 passed by the Commissioner of Income-tax (Appeals)-3, Vadodara [hereinafter referred to as the Ld.CIT(A) in short] arising out of the penalty order dated 27/02/2019 passed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as the Act ) relevant to the Assessment Year (AY) 2010-11. Facts of the case: 2. The Assessee is a Co-operative Bank stated to be in liquidation. The Reserve Bank of India (RBI) had issued directions u/s. 35A of the Banking Regulation Act, 1949 imposing some restrictions. According to these restrictions, the Bank, without prior approval in writing from the RBI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The crucial fact that the banking license of the petitioner has been cancelled by the Reserve Bank of India was disclosed in the original return itself. Further it is conveyed that the banking business is not closed but is only under liquidation withdrawal of license of not mean that the business is closed. The existing business has to be wound up by continuing business activities. Its status of being as cooperative has not been lost. Our appellant is in the process of winding up and is in the stage of earning interest income on the advance dues made. And hence therefore requested to allow the ser up of the business loss against the income earned in the relevant year. The Ld AO has erred in disallowing the set off of unabsorbed loss of the A.Y. 2003- 04 to the extent of the income earned in the relevant A.Y. 2010-11 of Rs. 1,21,94,779/- on the ground that the appellant has concealed the particulars of income of furnished inaccurate particulars of such income. During the year under consideration our client was engaged in carrying of the banking business and gas offered income from interest on advances to the members and interest on FDR as business income only for DICGC 9 (Deposit I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Hon ble Apex Court in case of Reliance Petroproducts Ltd. (supra) is misplaced. 3. Aggrieved by the order of the Ld.CIT(A), the assessee is in appeal before us with following grounds of appeal: Assessing office has wrongly levied penalty u/s. 271(1)(c). A.O. has not considered that due to technical reasons set off of losses claimed were not granted which no way leads to conclusion that particulars of income were concealed. Your appellant request leave to add or amend to substitute all or any of the ground of appeal at or before the hearing of appeal. 3.1. The assessee submitted following revised grounds of appeal before us: 1. Merely because the assessee has made certain claims, which were not accepted or were not acceptable to the revenue, that itself does not attract the penalty u/s 271(1)(c). 2. No penalty under section 271(1)(c) can be levied when all necessary facts were disclosed and there is no concealment. 3. Notice issued under section 274 r.w.s. 271(1)(c) of the act is not in accordance with law and therefore not sustainable. 4. The amount of interest income net off expenses Rs. 1,21,94,779/- is not an income of the assessee and therefore the same cannot be made subject m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration is earned by the liquidator on the fixed deposits placed out of recovery made from the borrowers. The Ld.AR also submitted that the bank has received money from DICGCI as settlement of claim and as per the term of settlement of claim more specifically in terms of Section 21(2) of the DICGC, Act 1961, the liquidator was required to repay to the corporation, as soon as the amount is realised in his hand. The Ld.AR further stated that there was an overriding title on its income in favour of DICGC and hence to that extent, it is not the income of the assessee. The assessee placed copy of Claim Settlement letter from DICGC to support its claim. 5. The Ld.Departmental Representative (Ld.DR), however, argued that the assessee has made false claim of set off of brought forward losses when it had not filed its return of income for subsequent years and therefore to the extent of income not disclosed it s a case of concealment of income. He placed reliance on the orders of lower authorities. 6. We have heard the rival contentions, perused the material available on records and noted that there was no failure to disclose material facts, as the cancellation of the banking license by the R ..... X X X X Extracts X X X X X X X X Extracts X X X X
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