TMI Blog2016 (1) TMI 601X X X X Extracts X X X X X X X X Extracts X X X X ..... RI H.S. SIDHU, JUDICIAL MEMBER Assessee : Sh. K. Sampath, Adv. and Sh. V. Raja Kumar, Adv. Department : Sh. P. Dam Kanunjna, Sr. DR ORDER This appeal by the Assessee is directed against the Order of the Ld. Commissioner of Income Tax (Appeals)-Meerut dated 18.7.2014 pertaining to assessment year 2006-07. 2. The grounds of appeal read as under:- 1. The Ld. CIT(A) has failed to appreciate that no penalty can be imposed in the facts and the circumstances of the case which are equally consistent with the hypothesis that the amount does not represent concealed income with the hypothesis that it does. The explanation of the assessee merely remaining disproved, it cannot tantamount to a positive inference that the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct is also established from the above statement of Sh. Bakshi as he is unable to tell the names of the parties to whom payments has to be made as on date. Furthermore, it is not possible to conduct a business of such a huge size without keeping any account of receipts and payments. As per the AO during the course of entire assessment proceedings, the assessee had been evading reply to the queries raised and also failed to comply with the statutory notices u/s. 142(1). From the bank statement filed by the assessee and the incomplete narration of these entries filed by him the credit entry dated 5.9.2005 of ₹ 3,00,000/- and dated 30.11.2005 for ₹ 4,49,145 were remained unexplained. Thereafter, the AO completed the assessment u/s. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . It has been held by the Hon ble Gujrat High Court that where the show cause notice of penalty is vague or ambiguous, no penalty is sustainable. The penalty notice contains both ingredients of penalty without satisfying the particular contravention for which the proceedings have been initiated. In such circumstances, the penalty as levied by the AO in terms of his order dated 29.12.2008 in ab initio invalid, illegal and must be quashed. Ld. Counsel for the assessee relied upon the following citations:- a) New Sorathia Engg. Co. (2006) 282 ITR 642 (Guj) b) Manu Engg. Works (Supra) (1980) 122 ITR 306 (Guj) c) Chennakesava Pharmaceuticals (2012) 349 ITR 196 (AP) d) Whiteford India Ltd. (2013) 38 Taxman.com 15 Finally, he stated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that he is satisfied that the assessee has concealed the true particulars of his income. For the sake of convenience, the relevant para at page no. 2 of the penalty order is reproduced as under:- In view of the clear cut confirmation of the addition of aforesaid two accounts of ₹ 3.00 lacs and ₹ 4,49,145/- totaling to ₹ 7,49,145/- by the CIT(A) in his order dated 25.11.2010, I am satisfied that the assessee has concealed the true particulars of his income. 7.1 Similarly, the AO as well as the Ld. CIT(A) has given clear finding regarding the concealment of income by the assessee. For the sake of convenience, the relevant lines of para 4.1 of the impugned order passed by the Ld. CIT(A) is reproduced as under:- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee was guilty of concealment of income or furnishing of inaccurate particulars of income. Secondly, the notice u/s. 271(1)(c) has been issued to the assessee levying the penalty for furnishing of inaccurate particulars of income, whereas the penalty in dispute has been levied by the AO on account of concealment of true particulars of income by the assessee. In my view the penalty is not sustainable in the eyes of law and my view is supported by the decision of the Hon ble Gujarat High Court in the case of CIT vs. Whiteford India Ltd. {2013} 38 taxmann.com 15 (Gujarat). Accordingly, I delete the penalty in dispute and decided the issue in dispute in favor of the assessee and against the Revenue. 9. In the result, the appeal filed by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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