TMI Blog2018 (5) TMI 1927X X X X Extracts X X X X X X X X Extracts X X X X ..... e of furnishing inaccurate particulars of income‟. The manner in which satisfaction has been recorded clearly falls short of legal requirement and hence the penalty proceedings and penalty order is vitiated. Thus, the order levying penalty has to be set aside. - Decided against revenue - ITA No.1169/PUN/2016 Assessment Year : 2004-05 - - - Dated:- 23-5-2018 - Shri Anil Chaturvedi, AM And Shri Vikas Awasthy, JM Assessee by : Shri R.G. Nahar Revenue by : Dr. Vivek Aggarwal ORDER Vikas Awasthy, JM : This appeal has been filed by the Revenue against the order of Commissioner of Income Tax (Appeals)-2, Kolhapur dated 16-03-2016 deleting penalty levied u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 1,77,40,780/-). The Assessing Officer levied penalty of ₹ 64,91,794/- u/s. 271(1)(c) on account of furnishing inaccurate particulars of income to the extent of addition confirmed by Tribunal. Against the order passed u/s. 271(1)(c) dated 13-08-2014, the assessee filed appeal before the Commissioner of Income Tax (Appeals). The Commissioner of Income Tax (Appeals) by placing reliance on the decision of Tribunal in assessee‟s own case for assessment years 2005-06 and 2006-07 deleted penalty in toto. Now, the Revenue is in appeal against the order of Commissioner of Income Tax (Appeals). 3. Dr. Vivek Aggarwal representing the Department submitted that during the course of assessment proceedings it was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee in order to suppress his income has furnished inaccurate particulars of income by creating bogus creditors in the books. The ld. DR further submitted that the Commissioner of Income Tax (Appeals) has erred in following the order of Tribunal in assessee‟s own case for assessment years 2005-06 and 200607. The facts in those years are distinguishable. In the present case, the Assessing Officer has made detailed investigation and the facts are available on record. The ld. DR prayed for reversing the findings of Commissioner of Income Tax (Appeals) and upholding the order of Assessing Officer. 4. On the other hand Shri R.G. Nahar appearing on behalf of the assessee vehemently defended the order of Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stained by the Commissioner of Income Tax (Appeals). The penalty has been levied on the amount confirmed by the Tribunal i.e. ₹ 1,77,40,780/-. A perusal of the order of Co-ordinate Bench in ITA No. 866/PN/2009 in assessment proceedings for the impugned assessment year indicate that the partial addition has been sustained merely on estimations. It is a well settled law that no penalty u/s. 271(1)(c) is sustainable where ad hoc additions are made. 6. The ld. AR has further pointed that there is a defect in recording satisfaction for initiating penalty proceedings u/s. 271(1)(c). A perusal of assessment order (para 7.7) shows that the Assessing Officer has recorded satisfaction for initiating penalty proceedings u/s. 271(1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bay High Court in the case of Commissioner of Income Tax Vs. Samson Perinchery reported as 392 ITR 4 under circumstances where both the limbs were mentioned by Assessing Officer for levy of penalty has held the penalty order bad in law. The relevant extract of the order of Hon‟ble High Court reads as under : 6. The above submission on the part of the Revenue is in the face of the decision of the Supreme Court in Ashok Pai v/s. CIT 292 ITR 11 [relied upon in Manjunath Cotton Ginning Factory (supra)] wherein it is observed that concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act, carry different meanings/ connotations. Therefore, the satisfaction of the Assessing Offic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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