TMI Blog2017 (11) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... te particulars. This shows that he has not applied his mind or was specific about his satisfaction under which limbs which intends to initiate or levy of penalty. - Appeal of the assessee is allowed. - ITA No. 6594/Del/2014 - - - Dated:- 21-8-2017 - SHRI AMIT SHUKLA, JUDICIAL MEMBER AND SHRI L.P. SAHU, ACCOUNTANT MEMBER For The Assessee : Shri Gagan Kumar, Advocate, Shri Amit Kaushik Advocate For The Revenue : Shri Anup Singh, Sr. DR ORDER PER AMIT SHUKLA, JUDICIAL MEMBER: The aforesaid appeal has been filed by the assessee against the impugned order dated 17.9.2014, passed by Learned CIT(Appeals)- XXVIII, New Delhi in relation to the penalty proceedings u/s 271(1)(c) for the A.Y. 2010-11. The assessee is mainly aggrieved by levy of penalty of ₹ 6,83,110/- on account of disallowance of depreciation on the property of ₹ 21,10,707/- in respect of newly purchased property. 2. The brief facts qua the issue relating to levy of penalty are that, the assessee has claimed depreciation expenses of ₹ 44,88,410/- out of which ₹ 13,25,000/- and ₹ 24,72,000/- relates to the depreciation on newly purchased properties at K-4, Sout ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sing Officer has not stroked off the inapplicable clause, i.e., whether the initiation is for concealment of the particulars of the income or for furnishing of inaccurate particulars. Finally in the penalty order, the penalty has been levied by the Assessing Officer for furnishing of inaccurate particulars of income. Thus, he submitted that the penalty order cannot be sustained because the Assessing Officer was not specific about the charge on which penalty should be initiated. In support of his contention he strongly relied upon the judgment of Hon'ble Gujarat High Court in the case of CIT vs. Manjunath Cotton Ginning Factory reported in (2013) 359 (Kar) 565; CIT vs. SSA S Emerald Meadows in ITA No 380 of 2015 dated 23.11.2015 (Kar)(HC); and SLP dismissed by Hon ble Apex Court in CIT vs. SSA S Emerald Meadows dated 05.08.2016. 4. On the other hand the ld. DR submitted that what is required to be seen is the penalty order wherein the Assessing Officer has clearly levied the penalty for furnishing of the inaccurate particulars of income. The conduct of the assessee and the overall substance of the facts needs to be seen, which herein this case, clearly points out that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... actory reported in 2013 359 (Kar) 565 have discussed this issue in detail. The relevant observation of the Hon'ble Tribunal in this regard reads as under:- 59. As the provision stands, the penalty proceedings can be initiated on various ground set out therein. If the order passed by the Authority categorically records a finding regarding the existence of any said grounds mentioned therein and then penalty proceedings is initiated, in the notice to be issued under Section 274, they could conveniently refer to the said order which contains the satisfaction of the authority which has passed the order. However, if the existence of the conditions could not be discerned from the said order and if it is a case of relying on deeming provision contained in Explanation-1 or in Explanation-1(B), then though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in Section 271 should be made known about the grounds on which they intend imposing penalty on him as the Section 274 makes it clear that assessee has a right to contest such proceedings and should have full opportunity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of penalty must be determined with reference to the information, facts and materials in the hands of the authority imposing the penalty at the time the order was passed and further discovery of facts subsequent to the imposition of penalty cannot validate the order of penalty which, when passed, was not sustainable. 61. The Assessing Officer is empowered under the Act to initiate penalty proceedings once he is satisfied in the course of any proceedings that there is concealment of income or furnishing of inaccurate particulars of total income under clause (c). Concealment, furnishing inaccurate particulars of income are different. Thus the Assessing Officer while issuing notice has to come to the conclusion that whether is it a case of concealment of income or is it a case of furnishing of inaccurate particulars. The Apex Court in the case of Ashok Pai reported in inaccurate particulars of income carry different connotations. The Gujrat High Court in the case of MANU ENGINEERING reported in 122 ITR 306 and the Delhi High Court in the case of VIRGO MARKETING reported in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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