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TMI Blog2024 (11) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Thus, as AO has passed an order u/s 271(1)(c) of the Act on two limbs; (i) concealed particulars of income and (ii) furnishing inaccurate particulars of income. Accordingly, we are in this opinion that penalty notice issued in this case suffers from infirmity that lack of satisfaction and lack of notice being issued in making the assessee aware regarding exact charge against him and hence, the same is liable to be quashed. Decided in favour of assessee. - Sri Rajesh Kumar, Accountant Member And Pradip Kumar Choubey, Judicial Member For the Assessee : S.K. Tulsiyan, Adv. For the Department : Ankur Goyal, JCIT, Sr. D/R. ORDER PER PRADIP KUMAR CHOUBEY, JUDICIAL MEMBER: This appeal filed by the assessee pertaining to the Assessment Year (in short AY ) 2010-11 is directed against the order passed u/s 250 of the Income Tax Act, 1961 (in short the Act ) by the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] dated 03.06.2024. 1.1. The brief facts of the case of the appellant are that the assessee filed return of income on 20.09.2010. The case of the assessee was selected for scrutiny and in the assessment u/s 143(3) of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o. 272 of 2017 dated 02.04.2019) Cal H.C. 8. S.D.Constructions, Kolkata vs A.C.I.T.,Circle-49(1), Kolkata on 1 October, 2021 (I.T.A. No. 243/Ko1/2021) 1.3. On the contrary, ld. D/R supports the impugned order. 2. Upon hearing, the submission of the Counsels of both the parties, we have perused the order passed by the ld. AO u/s 271(1)(c) of the Act and find that the ld. AO in his order has stated that assessee has no explanation to explain the source of cash deposited at Rs. 10 Lakh. According to the ld. AO, there was no satisfactory explanation offered by the assessee about the nature and source of the cash deposit and it is also evident that appeal of the assessee has also been dismissed on this ground. The ld. AO in its penalty proceeding has further held that as regards the second addition 26AS statement had shown interest income of Rs. 40,813/- in which the assessee having shown in its return of income and when assessee has been asked it is stated that they have not received the said sum. The ld. AO has further held in its penalty proceeding that third addition 26AS statement has shown rental income of Rs. 4,83,333/- and there was a difference of Rs. 40,000/- and on being aske ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lars of his income or furnished inaccurate particulars of his income. After recording the satisfaction, during the course of penalty proceedings also, the concerned Officer has come to a finding that as to whether the person has concealed the particulars of his income or furnished inaccurate particulars of such income and thereafter, levy the penalty accordingly. The word used between the two acts i.e. concealment of particulars of income and furnishing of inaccurate particulars of such income is 'or'. So the penalty levied by the concerned Officer is on satisfaction of any of the limbs and not the satisfaction of both the limbs. Where the assessee had concealed the particulars of income in particular circumstances, then the Assessing Officer may record satisfaction to that effect and initiate penalty proceedings and thereafter on fixation of charge, levy the penalty for such act of concealing the particulars of income. Similarly, in cases where the assessee concerned had furnished inaccurate particulars of such income, then similar exercise has to be carried out by the concerned Officer. 2.2. Now looking at the judgment cited by the assessee in this context and we find tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ngs also must be for both the offences. But drawing up penalty proceedings for one offence and finding the assessee guilty of another offence or finding him guilty for either the one or the other cannot be sustained in law. It is needless to point out satisfaction of the existence of the grounds mentioned in Section 271(l)(c) when it is a sine qua non for initiation or proceedings, the penalty proceedings should be confined only to those grounds and the said grounds have to be specifically stated so that the assessee would have the opportunity to meet those grounds. After, he places his version and tries to substantiate his claim, if at all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucation ITA 439/KOL/2023 dated 26.12.2023 it was held as under: 6. After hearing the rival contentions and perusing the material placed before us, we find that the notice dated 26.03.2015 was issued in a standard format, i.e. by mentioning both the limbs of penalty. In other words, it has been mentioned that the assessee has furnished inaccurate particulars of income, which is not correct position of law. In our opinion, the Id. Assessing Officer has to issue the show-cause notice by mentioning the correct limb on the penalty was proposed to be levied, which is lacking in this case and thus the assessee was deprived from replying to the show-cause notice thereby violating the principle of natural justice. Accordingly, we hold that the order passed by the Id. Assessing Officer is not sustainable in law and is quashed. 3. Going over the Hon'ble Apex Court s judgment and the order passed by the ld. AO u/s 271(1)(c) of the Act which is discussed by us in the preceding paragraph it is clear that the ld. AO has passed an order u/s 271(1)(c) of the Act on two limbs; (i) concealed particulars of income and (ii) furnishing inaccurate particulars of income. Accordingly, we are in this op ..... X X X X Extracts X X X X X X X X Extracts X X X X
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