TMI Blog2017 (12) TMI 1397X X X X Extracts X X X X X X X X Extracts X X X X ..... such expressions the penalty is not sustainable. In view of the above discussion, we uphold the order of the CIT(A) deleting the penalty levied by the AO for both the assessment years. Accordingly, the grounds raised by the Revenue for A.Yrs. 2010-11 and 2011-12 are dismissed. - ITA Nos. 2246 & 2247/PUN/2014 - - - Dated:- 25-10-2017 - Shri D. Karunakara Rao, AM And Shri Vikas Awasthy, JM Appellant by : Shri Achal Sharma, Addl. CIT Respondent by : Shri Nikhil Pathak ORDER Per D. Karunakara Rao, AM There are 2 appeals under consideration filed by the Revenue against the common order of CIT(A) Central, Pune dated 29-09-2014 for the A.Yrs. 2010-11 2011-12. 2. Grounds raised by the Revenue read as under : 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,000/- for A.Y. 2010-11 for concealment of income of furnishing of inaccurate particulars of income. Relevant extracts from the AO and penalty order are given in Para 10 of this order at overleaf. Same is the case for A.Y. 2011-12 too where the assessee disclosed additional income of ₹ 50 lakhs in the revised return of income as against the original return of income of ₹ 91,78,000/-. Eventually, AO levied the penalty of ₹ 16,60,875/- u/s.271(1)(c) of the Act. 4. However, CIT(A), vide common order dated 29-09-2014, deleted the penalties levied by the AO for both the A.Yrs. 2010-11 and 2011-2 relying on the judgment of Hon ble Karnataka High Court in CIT Vs. Narasimha Prasad reported in 250 ITR 852 (Kar.) and the Judg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the legal requirement of the satisfaction of the AO for initiating the penalty. Therefore, AO cannot be held complying with the requirement of law. Further, referring to the penalty order made u/s.271(1)(c) of the Act, Ld. AR drew our attention to para No.10 and submitted that the AO suffers from ambiguity in his mind since he did not tick any of the limbs of clause (c) of section 271(1) of the Act. 8. Further, the Ld. AR for the assessee relied on the following judgments for the proposition that penalty is not sustainable when there is no clear satisfaction recorded by the AO at the time of initiation of penalty proceedings : 1. Hon ble Bombay High Court in CIT Vs. Shri Samson Perinchery judgment dated 05-01-2017. 2. Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to specify the limb or stuck off an inappropriate limb of the provisions of section 271(1)(c) of the Act. It shows that the AO has not applied his mind to the fact for which reason of the default, the penalty notices were issued. We find the penalty order of the AO falls short of legal requirement on the issue under discussion. Initiation of penalty proceedings in this case done in a general sense and the levy of penalty is done for both the limbs and such orders are bad in law. This view gets strength by the judgment of Hon ble jurisdictional High Court in the case of CIT Vs. Shri Samson Perinchery dated 05-01-2017 as well as the judgment of Hon ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory 359 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me of ₹ 3 crore in his revised income. On the contrary, it is clear from the AO s order that notice under section 148 was issued by her only to regularize the revised return filed by the appellant and therefore, the issue of the said notice by the AO could not have been the reason which prompted the appellant to file the said revised return and declare additional income. The Hon. Karnataka High Court, in CIT v. Narasimha Prasad [2001] 250 ITR 852 (Kar.) wherein after a survey the appellant had filed revised return declaring a much higher income than declared in the original return, upheld the order of the ITAT that there was no concealment of income. It is also not in doubt that the assessment was ultimately completed at the income de ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... extracted as under : 7. We heard both the parties on this legal issue/additional ground and perused the assessment order/penalty order and the two notices issued u/s.274 and find the following operational lines are found worth to be extracted in this order : (1) Extract from the assessment order (Para No.5) : 5. . . . . . . . . . . . Hence, provisions of Explanation-5A of sec.271(1) are clearly applicable in this case and assessee has concealed income as per the provisions. (2) Extract from the penalty order (Para No.5) : 5. In view of above discussion, the undersigned is of the considered view that the assessee has concealed the income or has furnished inaccurate particulars of such income and is liable fo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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