TMI Blog2019 (5) TMI 183X X X X Extracts X X X X X X X X Extracts X X X X ..... se, we found that the AO has marked the concealment of particulars of income and furnishing of inaccurate particulars of income. It is imperative and clear that the AO is not sure on which limb the penalty is being levied. Passing of penalty order u/s 271(1)(c), found that there is no application of mind by the AO as he has marked both limbs of notice which is bad in law. We set aside the order of the CIT(A) and cancel the penalty order dated 31/12/2007 and allow the grounds of appeal of the assessee. - Decided in favour of assessee. - ITA No.1056/Bang/2018 - - - Dated:- 30-4-2019 - Shri B.R. Baskaran, Accountant Member And Shri Pavan Kumar Gadale, Judicial Member For the Appellant : Shri V.Srinivasan, Advocate. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs. 3. The assessee has also raised the additional grounds as under: 1. The order of penalty passed u/s 271[1][c] of the Act is bad in law as the notice issued under section 274 rws 271 of the Act is not discernable as to whether the penalty proceedings is initiated for furnishing of inaccurate particulars of income or concealment of income under the facts and in the circumstances of the appellant's case and therefore, the impugned order passed deserves to be cancelled. 2. For the above and other grounds that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the directions of the CIT u/s 263, passed the assessment order u/s 143(3) r.w.s. 263 of the Act dated 28/12/2010. On appeal to the CIT(A), the CIT(A) deleted the addition of ₹ 8,18,902/- whereas in respect of unaccounted cash purchases, the CIT(A) has sustained the addition to the extent of ₹ 3,10,420/-. Subsequently, the AO has initiated penalty proceedings and issued notice u/s 274 r.w.s. 271(1)(c) of the Act. 6. The AO is of the opinion that the CIT(A) has sustained the addition of unaccounted purchases of ₹ 3,10,420/- and the assessee has set up granite factory and started production in the financial year 2004-05. The assessee being lady, with the help of manager and husband of the assessee, the factory ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment proceedings shall not give rise to automatic levy of penalty as the circumstances and reasonable cause has been explained and prayed for quashing of notice issued u/s 274 r.w.s. 271(1)(c) of the Act and relied on judicial decision. Contra, learned DR relied on the orders of the lower authorities. 8. We heard the rival submissions and perused the material on record. The only disputed issue prima facie is in respect of levy of penalty u/s 271(1)(c) of the Act. The contention of the learned AR is that the AO has passed the penalty order without application of mind and referred to page 39 40 of the paper book where notice u/s 274 r.w.s. 271(1)(c) dated 31/12/2007 is enclosed. On perusal of the notice at page 40, as de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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