TMI Blog2020 (12) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... of non-application of mind and therefore the very initiation of proceedings are bad in law. - Decided in favour of assessee. - ITA NO. 210/MUM/2019 - - - Dated:- 17-11-2020 - Shri C.N. Prasad, Hon'ble Judicial Member And Shri S. Rifaur Rahman, Hon'ble Accountant Member For the Assessee : Shri Nishit Gandhi For the Department : M. Samatha ORDER PER C.N. PRASAD (JM) 1. This appeal is filed by the assessee against the order of the Learned Commissioner of Income Tax (Appeals) 28, Mumbai [hereinafter in short Ld.CIT(A) ] dated 22.11.2018 for the A.Y. 2010-11 in sustaining the penalty levied u/s. 271(1)(c) of the Act. 2. At the outset, Ld. Counsel for the assessee submitted that the initiation of penalty proceedings is bad in law as the Assessing Officer has not specified the limb for which the penalty was proposed to be levied. Ld. Counsel for the assessee referring to the notice issued u/s. 274 r.w.s 271(1)(c) of the Act submitted that the Assessing Officer is not clear as to the charge for which the penalty is initiated i.e. either for concealment of income or for furnishing inaccurate particulars. Referring to the notice Ld. Counsel for the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n setting up invalidity of Notice due to non-striking off the relevant limp would be like taking a pedantic view, however, this judgment in fact supports the case of the assessee wherein it is held that if penalty is levied without any application of mind of initiation and levy are on separate charge, then the penalty imposed must be deleted. 5. We have heard the rival submissions, perused the orders of the Authorities below, notice issued u/s. 274 r.w.s 271(1)(c) of the Act for initiation of penalty proceedings, we find that Assessing Officer did not strike off and specify the charge/limb for which he is proposing to initiate the penalty proceedings. In the assessment order Assessing Officer merely stated that Issue penalty notice u/s. 271(1)(c) of the Act . This shows that the Assessing Officer merely initiated the penalty proceedings u/s. 271(1)(c) of the Act. We observe that the Assessing Officer has not made any charge in the Assessment Order for initiation penalty proceedings. Assessing Officer has not made clear as to whether the penalty was initiated is either for concealment of income or for furnishing inaccurate particulars of income. He simply initiated the penalty ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Resorts and Recreation Pvt. Ltd., in Tax Appeal No. 24 of 2019 dated 11.11.2019 held as under: - 5. We have carefully examined the record as well as duly considered the rival contentions. Both the Commissioner (Appeals) as well as the ITAT have categorically held that in the present case, there is no record of satisfaction by the Assessing Officer that there was any concealment of income or that any inaccurate particulars were furnished by the assessee. This being a sine qua non for initiation of penalty proceedings, in the absence of such petition, the two authorities have quite correctly ordered the dropping of penalty proceedings against the petitioner. 6. Besides, we note that the Division Bench of this Court in Samson(supra) as well as in New Era Sova Mine(supra) has held that the notice which is issued to the assessee must indicate whether the Assessing Officer is satisfied that the case of the assessee involves concealment of particulars of income or furnishing of inaccurate particulars of income or both, with clarity. If the notice is issued in the printed form, then, the necessary portions which are not applicable are required to be struck off, so as to indicate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which particular limb of Section 271(1)(c) was invoked for initiating the penalty proceedings. The Court took the view that the matter was covered by an earlier decision of a Division Bench of that Court and did not involve any substantial question of law. The matter, thereafter, went in an SLP before the Supreme Court, who did not find any merit in the petition. The Tribunal also noticed that the jurisdictional High Court in the case of 392 ITR 4 had also taken the same view. 3. The Appeals, accordingly, do not involve any substantial question of law and do not merit admission. The Appeals are, accordingly, dismissed. 10. In the case of Pr.CIT v. Goa Dourado Promotions Pvt. Ltd., in Tax Appeal No. 18 of 2019 dated 26.11.2019 the Hon'ble Bombay High Court at Goa held as under: - 2. In this case, Ms. Linhares, the learned Standing Counsel for the appellant urges that the following substantial questions of law arise for consideration: - 1. Whether the Ld. ITAT erred in deleting the penalty by not considering the decision of the Apex Court in the case of Mak Data Pvt. Ltd. reported in 2013 (38) Taxman.com 448? 2. Whether the Ld. ITAT erred in holding the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulted into concealment, thus upholding the order of penalty. This obfuscated view of the CIT (A) was affirmed by the Tribunal. 32. On the ground that while the charge against the assessee was of furnishing inaccurate particulars of income whereas the penalty was imposed additionally for concealment of income, the order of penalty as upheld by the lower appellate authorities could be justifiably interfered with, still we would like to examine whether there was furnishing of inaccurate particulars of income by the assessee in the first place because that was the core charge against the assessee. 12. As could be seen from the above decision the facts are that the Assessing Officer initiated penalty proceedings in the Assessment Order making the charge as assessee had furnished inaccurate particulars of income but when passing the penalty order the penalty was levied for concealment of particulars of income. The Hon'ble Bombay High Court held that penalty cannot be imposed for alleged breach of one limb of section 271(1)(c) of the Act while penalty proceedings were initiated for breach of the other limb of section 271(1)(c) of the Act. 13. In the case on hand before us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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