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TMI Blog2021 (9) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome, the order imposing penalty for concealment of income was not valid. In the present case, the penalty was initiated for furnishing inaccurate particulars of income, however penalty is levied by the AO for concealment of income - CIT(Appeals) confirmed the penalty on the reason of furnishing inaccurate particulars of income - there is a defect in issue of notice and levy of penalty by the AO and confirmation of penalty by the CIT(Appeals), which invalidates the levy of penalty u/s. 271(1)(c) - Decided in favour of assessee. - ITA No. 3395/Bang/2018 - - - Dated:- 31-8-2021 - Shri N.V. Vasudevan, Vice President And Shri Chandra Poojari, Accountant Member For the Appellant : Shri Ravi Shankar, Advocate For the Respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y levied by the assessing officer and consequently the order is bad in law on the facts and circumstances of the case. 7. Without prejudice, the order passed by the CIT(A) is in violation of the principles of natural justice in respect of confirming the penalty on the limb which was not even invoked in the penalty order of the AO and consequently the order is required to be quashed on the facts and circumstances of the case. 8. The learned CIT(A) failed to appreciate that penal statutes have to construed strictly on the facts and circumstances of the case. 9. The learned CIT(A) failed to appreciate that the issue of penalty notices under section 274 of the Act, permit the AO to assume jurisdiction over the appellant and was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under:- Sl No. Nature of Addition Rs. 1 Variation in contract receipts 15,91,922/- 2 Undisclosed contract receipts 87,744/- 3 Undisclosed interest receipts 38,20,262/- 4 Unexplained investment in purchases vehicle and furniture 1,68,540/- 5 Variation in sundry creditors 16,94,901/- 6 Disallowance of excess deductions claimed under the head de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r furnishing inaccurate particulars of income. He however levied penalty for concealing the particulars of income which was confirmed by the CIT(Appeals) on the reason of furnishing inaccurate particulars of income. According to the ld. AR, there is variation in initiating the proceedings and levying penalty by the AO and confirmed the levy of penalty by the CIT(Appeals). Hence the penalty has to be deleted on this reason. He relied on the judgment of the Hon ble Bombay High Court in Mohd. Farhan A. Shaikh v. DCIT, 125 taxmann.com 253 (Bombay) wherein it was held as follows:- In assessment proceedings, revenue forms an opinion, prima facie or otherwise, to launch penalty proceedings against the assessee. But that translates into ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ticulars of income, the order imposing penalty for concealment of income was not valid. 7. On the other hand, the ld. DR relied on the order of CIT(Appeals). 8. We have heard both the parties and perused the material on record. Section 271(1)(c) of the Act has two limbs for levy of penalty; (i) concealment of particulars of income; and (ii) furnishing inaccurate particulars of income. Being so, it is incumbent upon the AO to state whether penalty was being levied for concealment of income or furnishing inaccurate particulars of income. One limb out of the two must be mentioned by the taxing authority in the notice for levying such penalty. If both limbs have been mentioned in the notice or one irrelevant limb is not struck o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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