TMI Blog2019 (10) TMI 1062X X X X Extracts X X X X X X X X Extracts X X X X ..... me. Merely because of the fact that the deductions claimed by the assessee have been disallowed the provisions contained u/s 271(1)(c) are not attracted. - Decided in favour of assessee - ITA No.598/Del./2016, ITA No.599/Del./2016, ITA No.600/Del./2016 - - - Dated:- 24-9-2019 - Shri R.K. Panda, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : Shri Karan Kumra, CA For the Revenue : Smt. Naina Soin Kapil, Senior DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Since common questions of facts and law have been raised in the aforesaid appeals, the same are being disposed off by way of consolidated order to avoid repetition of discussion. 2. Appellant, M/s. Sudhir Transformers Ltd. (hereinafter referred to as the assessee ) by filing the present appeal sought to set aside the impugned order dated 20.01.2016, 201.2016 01.12.2015 passed by the Commissioner of Income-tax (Appeals)-23, New Delhi affirming the penalty order dated 23.03.2015, 23.03.2015 18.03.2014 passed u/s 271(1)(c) of the Income-tax Act, 1961 (for short the Act ), qua the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - ₹ 1,06,341/- Total - ₹ 9,37,774/- AY 2009-10 ESI - ₹ 88,511.66 Provident Fund - ₹ 68,842.32 Sales CST Silvassa - ₹ 2,54,996.00 Total - ₹ 4,12,349.98 Deduction u/s 43B were duly disclosed by the appellant company, and there could be no basis much less valid basis to disallow the same and further imposition of penalty in misconceived and unsustainable in law and should be deleted, as such. 3. Briefly stated the facts necessary for adjudication of the issue at hand are : On the basis of completed assessment framed under section 143 (3) of the Income-tax Act, 1961 (for short the Act ) read with section 153C vide order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ala Meadows -73 taxmann.com 241 (Kar.) (Revenue s SLP dismissed in 242 taxman 180) and Hon ble High Court of Delhi in Pr. CIT vs. Sahara India Life Insurance Company Ltd. in ITA 475/2019 order dated 02.08.2019. 9. Ld. DR for the Revenue in order to repel the arguments addressed by the ld. AR for the assessee relied upon the orders passed by the AO and the ld. CIT (A). 10. In order to proceed further, we would like to peruse the notice dated 26.12.2011 in all the cases issued by AO u/s 274 read with section 271(1)(c) of the Act to initiate the penalty proceedings which is extracted as under for ready perusal:- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. Asstt. Commission of Income Tax, Central Circle-25, New Delhi. Dated: 26.12.2011 To M/s Sudhir Infra Vidyut Ltd. 507, International Trade Tower, Nehru Place, New Delhi -110 019. Whereas in the course of proceedings before me for the assessment year 2007-08 it appears to me that you: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 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 to meet the case of the Department and show that the conditions stipulated in Section 271 (1)( c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100% to 300% of the tax liability. As said provisions have to be held to be strictly con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 T Ashok Poi v. CIT [2007] 292 ITR 11 /161 Taxman 340 at page 19 has held that concealment of income and furnishing inaccurate particulars of income carry different connotations. The Gujarat High Court in the case of CIT v. Manu Engg. [1980] 122 ITR 306 and the Delhi High Court in the case of CIT v. Virgo Marketing (P) Ltd. [2008] 171 Taxman 156, has held that levy of penalty has to be clear as to the limb for which it is levied and the position being unclear penalty is not sustainable. Therefore, when the Assessing Officer proposes to invoke the first limb being concealment, then the notice has to be appropriately marked. Similar is the case for furnishing inaccurate part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reme Court of India in SLP No. 11485 of2016 by order dated 5th August, 2016. 15. Following the decisions rendered in the cases of CIT vs. Manjunatha Cotton and Ginning Factory, CIT vs. SSA s Emerala Meadows and Pr. CIT vs. Sahara India Life Insurance Company Ltd. (supra), we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. 16. Even, on merits, it is not in dispute that the assessee has disclosed all the deductions claimed u/s 43B of the Act which leads to the conclusion that there is no concealment, no malafide or false representation as the case may be on the part of the assessee in claiming deductions u/s 43B of the Act and as such, the same cannot be amounted to concealment of particulars of income or furnishing of inaccurate particulars of such income. Merely because of the fact that the deductions claimed by the assessee have been disallowed the provisions contained u/s 271(1)(c) are not attracted. 17. Hon ble Supreme Court in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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