TMI Blog2018 (12) TMI 1810X X X X Extracts X X X X X X X X Extracts X X X X ..... lars of income by the assessee. It is settled principle of law that in order to initiate the penalty proceedings the Assessing Officer is required to make the assessee aware as to whether there is a concealment of income or furnishing of inaccurate particulars of income on her part, which is entirely missing in this case. In a case cited as CIT vs. Manjunatha Cotton and Ginning Factory Ors. [2013 (7) TMI 620 - KARNATAKA HIGH COURT ] confirmed by the Hon ble Supreme Court, held that when the assessee has not been specifically charged as to whether there is concealment of income or furnishing inaccurate particulars of income on her part, the penalty u/s 271(1)(c) is not sustainable. Merely making inaccurate claim does not amo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has erred in upholding the penalty of ₹ 25,000/-, imposed by the AO, invoking the provisions of sec. 271(1)(c) of the IT Act, 1961. 2. That the Ld. CIT (Appeal) has erred in upholding the penalty of ₹ 25,000/-, without looking into facts and circumstances of the case and relying on irrelevant judicial pronouncements. 3. That the impugned appellate order is arbitrary, illegal, bad in law and in violation of rudimentary principles of contemporary jurisprudence. 2. Briefly stated that facts necessary for adjudication of the controversy at hand are : on the basis of completed assessment u/s 143(3) of the Income Tax Act, 1961 (for short the Act ) a total income of ₹ 17,15,945/- was assessed by making addition of S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tricted the addition to ₹ 74,000/- by allowing the relief of ₹ 1,38,000/- to the assessee. 6. In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower Revenue authorities and arguments addressed by the ld. AR to the parties, the sole question arises for determination in this case is :- as to whether the assessee has concealed particulars of income or has furnished inaccurate particulars of income during assessment proceedings while interpreting the provisions contained u/s 271(1)(c) of the Act. 7. First of all, We have noticed that AO has not recorded valid satisfaction in order to initiate the penalty proceedings u/s 271(1)(c). Perusal of para 4.1 on page 3 of the assessment ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en relief to the extent of ₹ 1,38,000/-, it cannot be said that it is furnishing of inaccurate particulars of income. Reliance in this regard is placed on decision rendered by Hon ble Apex Court cited as Reliance Petro Pvt. Ltd. 322 ITR 158 (SC). 11. So, following the law laid down by Hon'ble High Court, we are of the considered view that when the assessee has not been specifically made aware of the charges leveled against her as to whether there is a concealment of income or furnishing of inaccurate particulars of income on her part, the penalty u/s 271(1)(c) of the Act is not sustainable. 12. In view of what has been discussed above AO has failed to make out of the case of concealment of income or furnishing of inaccurate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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