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2019 (3) TMI 314 - AT - Income TaxPenalty u/s 271(1)(c) - disallowance claimed by the assessee under the head “professional and legal charges” by treating the same as capital expenditure - HELD THAT:- When there is two views if the expenditure claimed are capital or revenue in nature, again there is no question of attracting provisions contained under section 271(1)(c). AO himself is not satisfied since the time of framing assessment as to under which limb of section 271(1)(c) penalty is to be levied, he cannot be permitted under law to wash of his hands by taking recourse to Explanation 1 to section 271(1)(c) by placing the entire onus on the assessee to prove that there is no concealment of income/furnishing of inaccurate particulars of income. Penalty order further make it clear that at no point of time right from the passing of the assessment order till passing the penalty order, AO has not made himself satisfied or clear enough if the assessee has furnished inaccurate particulars of income or has concealed the particulars of income. The case of Sundaram Finance Ltd.[2018 (10) TMI 1451 - SUPREME COURT] as relied upon by ld. DR for the Revenue is not applicable to the facts and circumstances of the case. Decision rendered in CIT vs. SSA’s Emerala Meadows [2016 (8) TMI 1145 - SUPREME COURT] and CIT vs. Manjunatha Cotton and Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] are squarely applicable to the facts and circumstances of the case as the AO has miserably failed to specify in the notice issued under section 274 read with 271(l)(c), "as to whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income”, so in these circumstances, penalty levied by the AO and confirmed by CIT (A) is not sustainable in the eyes of law. Consequently, the appeal filed by the assessee is allowed.
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