TMI Blog2014 (5) TMI 776X X X X Extracts X X X X X X X X Extracts X X X X ..... the view taken by the Tribunal that mere making of mention that penalty proceedings were being separately initiated in the order of assessment did not justify initiation of penalty proceedings, cannot be upheld - the initiation of penalty proceedings are held to be valid – Decided in favour of Revenue. Validity of deletion of penalty by Tribunal – Held that:- The AO had primarily levied penalty by treating the amount as cessation of liability whereas the CIT(A) did not agree with it but held that the account of BPCL showed less balance - there was inaccurate furnishing of particulars of income - The amount was shown payable to BPCL as on 31.3.2000 and 31.3.2001 - it would not amount to cessation of liability - The assessee had pleaded t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te Tribunal is right in law in deleting the penalty levied by the Commissioner of Income Tax Appeals on different grounds, than what was levied by the Assessing Officer? 2. A few facts relevant for the decision of the controversy involved, as narrated in the appeal may be noticed. The assessee filed return on 31.10.2001 declaring income of Rs. 2,67,640/-. The assessment under section 143(3) of the Act was completed on 26.2.2004 at total income of Rs. 4,43,780/-. The assessee did not prefer any appeal before the Commissioner of Income Tax (Appeals) [the CIT(A)] against the assessment order. The Assessing Officer levied a penalty of Rs. 46,072/- under section 271(1)(c) of the Act on account of furnishing of inaccurate particulars of his in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we find that the Tribunal after examining the entire material before it came to the conclusion that the Assessing officer had not recorded any satisfaction while initiating the penalty proceedings and thus he had no jurisdiction to levy penalty under Section 271(1) (c) of the Act. Finance Act, 2008 effective retrospectively from 1.4.1989 had inserted sub section 1B in Section 271 of the Act, which reads thus:- (1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or reassessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub section (1), such an order of assessment or reassessment shall be deemed to constitute sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 271(1) (c) of the Act on the ground that amount of Rs. 1,31,262/- represented the cessation of liability under Section 41(1) of the Act and wrong disclosure of the balance payable to BPCL amounted to furnishing of inaccurate particulars of income. The CIT (A) held that the amount of Rs. 1,31,262/- was not on account of cessation of liability. However, he levied penalty under Section 271(1) (c) of the Act for furnishing of inaccurate particulars of income as there was difference of Rs.1,31,262/- in the account of the BPCL. The Tribunal cancelled the penalty on the ground as noticed hereinabove. 7. It was not disputed that the Assessing Officer had primarily levied penalty by treating the amount of Rs. 1,31,262/- as cessation of liab ..... X X X X Extracts X X X X X X X X Extracts X X X X
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