TMI Blog2017 (12) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... , the ld AR of assessee is succeeded in convincing us on his first two preposition that neither the AO recorded his satisfaction about initiating and in imposing the penalty on particular limb of section 271(1)(c) and there was difference of opinion on the disallowance of expenditure. Hence, the grounds of appeal raised by the assessee are allowed - ITA No.263/Mum/2016 - - - Dated:- 20-12-2017 - SHRI P.K. BANSAL, VICE-PRESIDENT AND SHRI PAWAN SINGH, JUDICIAL MEMBER For The Assessee : Shri Vimal Punamiya with Shri Darshan Gandhi (AR) For The Revenue : Shri V.Justin (DR) Order Under Section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER : 1. This appeal by assessee under section 253 of Income Tax Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ; 15,00,483/- under section 271(l)(c) not appreciating the view that issue was debatable in nature and no penalty can be levied on such issues. 2. Brief facts of the case are that assessee is engaged in the business of equity shares, broker in National Stock Exchange and Bombay Stock Exchange, Mutual Funds distribution and having Merchant Broking Services license from SEBI, filed its return of income for relevant Assessment Year on 30th October 2005. Subsequently, the assessee filed revised return of income on 31st March 2007 declaring total income of ₹ 2,39,83,993/-. The assessment was completed on 27th December 2007. The Assessing Officer while passing the assessment order besides the other additions and disallowance made the add ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessing Officer while passing the assessment order has not recorded satisfaction for initiating penalty whether the assessee has concealed the income or furnished inaccurate particular of income . The satisfaction of the Assessing Officer is must and it should be clear from the assessment order itself. Since, the Assessing Officer failed to record such satisfaction in the Assessment Order, the penalty order is liable to be quashed. In support of his submission the ld. AR of the assessee relied upon the decisions of Hon ble Andhra Pradesh High Court in CIT vs. Lotus Construction reported vide [2015] 370 ITR 475(A P), V.V. Projects and Investment Private Limited Vs DCIT [2008] 300 ITR 40(AP), Chennakeshwar Pharmacautical Vs CIT [2012] 349 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nor furnished inaccurate particular while filing the return of income. The assessee furnished and disclosed all particulars while furnishing the return of income. The Assessing Officer while making disallowance nowhere recorded that the assessee has either concealed the income or furnished inaccurate particular thereof. In other alternative submission the ld. AR of the assessee relied that the order of penalty was time-barred and the same was not passed within the prescribed period of limitation as prescribed under section 275 of the Act. Finally the ld. AR argued that Assessing Officer was bound to follow the order of Tribunal and Assessing Officer has not followed the direction of Tribunal. The lower authorities has no option except eithe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ce on account of penalty levied by SEBI, (iii) disallowance on account of Capitalization of expenditure on leased premises and (iv) disallowance on account of non-deduction of TDS on payment to related party. While making disallowances the assessing officer has not recorded his satisfaction about the initiation of penalty on such disallwances. At the end of assessment order the assessing officers just mentioned notice u/s 271(1)(c) of the Act issued separately. Admittedly there is no satisfaction of the assessing officer regarding the initiation of penalty in assessment order. Coming back to the order of penalty, initially the penalty order was passed on 29.03.2010. The penalty levied vide order dated 29.03.2010 has already been set aside ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be incorrect or erroneous or false. Such not being the case, there would be no question of inviting the penalty under Section 271(1)(c) of the Act. In our view mere making of the claim, which is not sustainable in law, by itself, will not amount to furnishing inaccurate particulars regarding the income of the assessee. Such claim made in the Return cannot amount to the inaccurate particulars. In our view the assessee had furnished all the details of its expenditure as well as income in its Return, which details, for which there is no finding that the details were not found to be inaccurate nor could be viewed as the concealment of income on its part. It was up to the AO to accept its claim in the Return or not. Merely because the assessee h ..... X X X X Extracts X X X X X X X X Extracts X X X X
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