TMI Blog2018 (5) TMI 1102X X X X Extracts X X X X X X X X Extracts X X X X ..... Such penalty order is unsustainable in law legally. The manner of initiating and levying of penalty without making reference to the specific limb of clause (c) is unsustained. AO is under obligation to specify the correct limb at the time of initiation as well as at the time of levy of penalty. Therefore, the penalty levied by the AO and confirmed by the CIT(A) is unsustainable on technical grounds. - Decided in favour of assessee. - ITA No.1490/PUN/2015 - - - Dated:- 5-4-2018 - MS. SUSHMA CHOWLA, JM AND SHRI D. KARUNAKARA RAO, AM Appellant by : Shri Maruti Kadam Respondent by : Shri Ajay Modi, JCIT ORDER PER D. KARUNAKARA RAO, AM : This appeal is filed by the assessee against the order of CIT(A)-11, Pune, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... filed return of income on 20-12-2012 declaring total income at ₹ 20,11,24,204/-. Subsequently, the said return was revised declaring income of ₹ 20,25,46,504/-. There was search action on the assessee. Assessee disclosed additional income of ₹ 3,91,04,244/-. During the search action u/s.132(4) on 03-04-2012, a laptop used by Shri Anirudh Phadke was seized and a statement was recorded. Based on the cash inflow and outflow statements available in the laptop, AO proceeded to make addition of ₹ 1.10 crores as income from undisclosed sources. AO also made addition of ₹ 4,61,638 u/s.14A r.w.Rule 8D of the I.T. Rules, 1962. Eventually, AO determined the income of the assessee at ₹ 21,40,08,142/- u/s.147 r.w.s. 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other limb of clause (c) is bad in law and unsustainable. To this proposition, he relied on the decision 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 565. 8. On the other hand, Ld. DR for the Revenue submitted that the AO/CIT(A) is justified in levying the penalty as the assessee has offered the additional income during the search and filed the revised return consequent to search and no explanation whatsoever has been offered. Therefore, Ld. DR prayed for confirming the orders of the authorities below. 9. We heard both the parties on this legal issue an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by way of penalty u/s.271(1)(c) of the I.T. Act, 1961, which is equal to sum of tax sought to be evaded, . . . . . . . From the above, it is clear that the AO initiated the penalty proceedings for the offence of concealing the particulars of income and levied the same for furnishing inaccurate particulars . Therefore, it is a case where the AO did not have clarity of thought and AO suffered from ambiguity in his mind with regard to the applicable limb of clause (c) of section 271(1) of the Act to the facts of the case. Therefore, we find the penalty order of the AO falls short of legal requirement on the issue of recording of satisfaction. Initiation of penalty proceedings is made for one limb and the penalty was levied for other li ..... X X X X Extracts X X X X X X X X Extracts X X X X
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