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2021 (8) TMI 335 - ITAT JAIPURPenalty u/s 271(1)(c) - non specification of charge - whether for concealment of income or furnishing of inaccurate particulars of income? - concealment of income or for furnishing inaccurate particulars of income - HELD THAT:- Notice u/s 274 r.w.s. 271(1)(c) of the Act should have specifically indicated in which limb of Sec. 271(1)(c) the penalty proceedings were initiated i.e. whether for concealment of income or furnishing of inaccurate particulars of income. Thus, in absence of a particular limb, no penalty should have been levied on the assessee as the determination of such limb is sine qua non for imposition of penalty u/s 271(1)(c). AO has simply mentioned in his order with regard to initiation of penalty by stating that the assessee has concealed the income or furnishing inaccurate particulars of income by introducing non-genuine purchases thus it is a fit case for initiating the penalty proceedings u/s 271(1)(c) of the Act. Later on a pre-printed/cyclostyle performa by way notice u/s 274 r.w.s 271(1)(c) of the Act without striking off the unnecessary portions of the notice was served upon the assessee, we are of the view that, if at all, the A.O. was of the view that the assessee has concealed the income or furnishing inaccurate particulars of income then in that eventuality, he should have deleted or not mentioned the other limb for imposition of penalty. This act of the A.O. clearly indicates that the entire exercise of initiation of penalty proceedings has been done in a casual and cavalier manner. The notice u/s 271 should be specific for imposition of penalty u/s 271 (1) (c) of Act i.e. for concealment of particulars of income or furnishing inaccurate particulars of income as has been held in the case of CIT Vs. M/s SSA's EMERALD MEADOWS [2015 (11) TMI 1620 - KARNATAKA HIGH COURT]. We are of the view that concealment of income or furnishing of inaccurate particulars of income are two different forms and they cannot be inter mixed, therefore, we quash the penalty proceedings initiated U/s 271(1)(c). Trading addition - Bogus purchases - HELD THAT:- It is a settled law that additions based on estimation where higher trading profit as declared against the gross profit has been declared therein, in that cases, no penalty is leviable as it cannot be held that in those cases, the assessee has concealed income or of furnishing inaccurate particulars of income within the provisions of Section 271(1) (c) of the Act. This proposition has been upheld in case of CIT Vs. Dhillon Rice Mills [2000 (9) TMI 10 - PUNJAB AND HARYANA HIGH COURT] and in case of Hari Gopal Singh [2019 (4) TMI 1997 - ITAT JAIPUR] - In both these decisions, it has been held by the Hon’ble Courts that the provisions of Section 271(1)(c) are not attracted to cases where the income of an assessee is assessed on estimate basis and additions are made therein. As per the facts of the present case, the additions were made on estimation basis whereas the gross profit declared by the assessee was much better than the previous years. Even in the case of CIT Vs. Aero Traders P. Ltd. [2010 (1) TMI 32 - DELHI HIGH COURT] the profit was estimated after rejection of the books of account due to certain discrepancies, imposed a penalty on the assessee on the ground that it was clear case of furnishing of inaccurate particulars of income. However, the Tribunal held that it did not amount to concealment of income or furnishing of inaccurate particulars of income therefore, deleted the penalty and Hon'ble High Court of Delhi confirmed the order of ITAT. Further the Hon’ble Rajasthan High Court in case of Shiv Lal Tak . [2001 (2) TMI 62 - RAJASTHAN HIGH COURT] also upheld the said proposition. Further glaring facts have also been placed on record before us wherein we noticed that the ld. CIT(A) in assessee’s own case for the previous year i.e. A.Y. 2007-08 had deleted the penalty levied by the A.O. on identical facts and circumstances, therefore, taking into consideration the totality of facts and circumstances of the case as mentioned above, we are of the view that since the additions in the present case were made purely on the basis of estimation, therefore, no penalty is leviable or attracted in the present case. Accordingly, we direct to delete the penalty levied u/s 271(1)(c) .
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