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Manu Bali, C/o Matta & Associates Versus ACIT, Circle 32 (1) , New Delhi

2017 (10) TMI 319 - ITAT DELHI

Penalty u/s 271(1)(c) - concealment of particulars of income or furnishing of inaccurate particulars - validity of notice - Held that:- The notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. See CIT & Anr. Vs. M/s SSAs Emerald Meadow .....

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011-12. 2. The grounds of appeal raised in the assessee s appeal read as under:- 1. That the Ld. CIT(A) has grossly erred by confirming the penalty imposed by the Assessing Authority of ₹ 98,996/- under section 271(1)(c) of the I.T. Act, 1961. 2. That the Ld. CIT(A), New Delhi has further erred by not appraising himself about the whole facts of the case before confirming the penalty imposed by AO of ₹ 98,996/-. 3. That the Ld. CIT(A) has further erred by approving the action of the A .....

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nditure claimed u/s. 57 of the I.T. Act, 1961 amounting to ₹ 3,20,377/-. The AO had initiated penalty proceedings u/s. 271(1)© of the Act on the disallowance of ₹ 3,20,377/- in the assessment order. The assessee has filed appeal against the assessment order for the year under consideration. In other words, the assessee has accepted the addition made during the course of assessment proceedings. The facts on the issue of addition of ₹ 3,20,377/- are that on perusal of the co .....

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ll the entries of overdraft account out of which loans have been taken and interest is being paid. In response to the same, the assessee gave the reply dated 18.12.2013. The reply of the assessee was considered by the AO but found partially acceptable. Thereafter, the AO observed that deduction of processing charges paid by the assessee was not allowable since the purpose of opening this OD account had not been made clear by the assessee. The number of withdrawals for personal / other purposes w .....

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o the same assessee furnished its reply dated 10.2.2014 and after considering the same, the AO levied the penalty u/s. 271(1)(c) by observing that the assessee has furnished inaccurate particulars within the meaning of explanation 1 to the sub-section (1) of section 271(1)© of the I.T. Act, 1961 where penalty should invariably be imposed. AO further observed that the act of assessee was a deliberate act to evade the tax on amount of ₹ 3,20,377/- and an act committed for concealment of .....

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passed u/s. 143(3) of the Act and stated that while completing the assessment the AO has initiated the penalty proceedings u/s. 271(1)© of the Act for concealment of income and for furnishing of inaccurate particulars within the meaning of explanation 1 to the sub-section (1) of section 271(1)(c) of the I.T. Act. Similarly, he also draw our attention towards the penalty order dated 27.8.2014 wherein the AO has observed that the act of the assessee was a deliberate act to evade the tax on a .....

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isions:- Hon ble Karnataka High Court decision in the case of CIT & Ors. Vs. M/s Manjunatha Cotton and Ginnig Factory & Ors. (2013) 359 ITR 565 - Apex Court decision in the case of CIT & Anr. Vs. M/s SSA s Emerald Meadows in CC No. 11485/2016 dated 05.8.2016. In view of above, he requested that the penalty in dispute may be cancelled and appeal of the assessee may be allowed. 6. On the contrary, Ld. DR relied upon the orders of the authorities below and also filed the written submiss .....

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ceedings under section 276C 2. CIT Vs Zoom Communication (P.) Ltd. [191 Taxman 179 (Delhi)/[2010] 327 ITR 510 (Delhi)/[2010] 233 CTR 465] where Hon'ble Delhi High Court held that If assessee makes a claim which is not only incorrect in law, but is also wholly without any basis and explanation furnished by him for making such- a claim is. not found to be bona fide, Explanation 1 to section 271 (1 )(c) would come into play and assessee will be liable to penalty 3. CIT Vs Moser Baer India Ltd. .....

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retrospective effect 5. CIT vs. Gates Foam & Rubber Co [91 ITR 467] CIT vs India Seafood [105 ITR 708] where Hon'ble Kerala High Court held that Claiming excessive deduction also amounts to concealment of income 6. Steel Ingots Ltd vs. CIT [296 ITR 228] where Hon'ble Madhya Pradesh High Court held that in case of concealment of true income chargeable. to tax by making bogus claim, levy of penalty u/s 271 (1 )(c) read with Explanation 1 is justified 7. CIT Vs Escorts Finance Ltd [183 .....

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itten submissions filed by the Ld. DR. After perusing the aforesaid records, we are of the considered view that in the assessment order dated 03.2.2014 passed u/s. 143(3) of the Act, the AO while completing the assessment initiated the penalty proceedings u/s. 271(1)© of the Act for concealment of income and for furnishing of inaccurate particulars within the meaning of explanation 1 to the sub-section (1) of section 271(1)(c) of the I.T. Act. We further note that similarly in the penalty o .....

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ed because the assessment order as well as penalty order are not sustainable in the eyes of law, in view of the following case laws. i) CIT & Anr. Vs. M/s SSA s Emerald Meadows - 2015 (11) TMI 1620 - Karnataka High Court has held that Tribunal has correctly allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under section 274 read with Section 271(1)(c) to be bad in law as it did not specify which limb of Section 271(1)© of the Act, the penalty pr .....

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