Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (8) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (8) TMI 92 - AT - Income TaxPenalty u/s 271(1)(c) - Validity of notice - additions towards unexplained cash credits - assessee has voluntarily surrendered additions, not for any of the reasons, but to buy peace and to end litigations - notice issued for one limb and penalty levied for another limb - HELD THAT:- AO has not arrived at clear satisfaction as to under which limb of provisions of section 271(1)(c) of the Act, the proposed penalty proceedings has been initiated, which is evident from the fact that there is no clear satisfaction in the assessment order and the notice is absolutely silent on this aspect. The said lapse is continued even in penalty order passed u/s 271(1)(c) which is evident from the fact that where the penalty has been levied on both limbs. It is a well settled proposition of law that penalty cannot be initiated for the limb, which is different from the limb for which proposed penalty proceedings has been initiated. Further, if the penalty proceedings has been initiated for one limb and levied under different limb, then the whole penalty proceedings become vitiate. AO has to arrived at clear satisfaction regarding the limb under which, he proposed to levy penalty before issue of notice u/s 274 r.w.s 271(1)(c) of the Act. This legal proposition is supported by the decision of Hon’ble Karnataka High court in the case of CIT vs. Manjunatha cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] and was upheld by the Hon'ble Supreme court, in the case of CIT vs M/s SSA's Emerald Meadows [2016 (8) TMI 1145 - SC ORDER]. CIT vs Samson Perinchery [2017 (1) TMI 1292 - BOMBAY HIGH COURT] has held that if notice issued for one limb and penalty levied for another limb then, the whole proceedings become void ab-inito and liable to be quashed. In this case, on perusal of facts, we find that the Ld. AO has failed to arrive at clear satisfaction - Decided in favour of assessee.
|