TMI Blog2021 (4) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... ted and thus suffers from vice of ambiguity. The condition precedent for exercise of jurisdiction under s. 271(1)(c) r.w.s. 271(1B) of the Act is thus not satisfied in the instant case. Having regard to the complex facts involved in the case in hand, the nature of charge against the assessee cannot be left to imagination. Consequently, the penalty proceedings initiated towards additions made on the basis of vague satisfaction in the course of assessment is a complete non-starter. The consequent penalty imposed under s. 271(1)(c) of the Act as a sequel to such invalid satisfaction requires to be quashed. The explanation offered towards bonafide issue of share capital thus cannot be outrightly rejected when tested on the touchstone of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. The ground of appeal raised by assessee read hereunder: 1. That the learned CIT(A) has erred in laws and facts by confirming the penalty of ₹ 13,50,000/- u/s. 271(1)(c) of the Act and therefore the ld. AO should be directed to delete the said penalty of ₹ 13,50,000/-. 3. Briefly stated, the assessee company earlier named KGMS Financial Services Pvt. Ltd. is engaged in the business of dealing stock market and purchase and sale of shares. The assessee filed return of income for AY 2007-08 declaring total income of ₹ 24,60,420/-. The return filed by the assessee was subjected to scrutiny assessment under s. 143(3) of the Act wherein total income was determined at ₹ 69,69,045/-. The AO inter alia made an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccommodation in the statement pursuant to Section 131 of the Act. The unverified statement of Rupang Shah has been given undue primacy which was given only to absolve him at the cost of assessee. In this background, it is contended that the penalty imposed on share capital money received through banking channel is not justified at all. 6. It was secondly contended that the AO has initiated penalty proceedings under s. 274 r.w.s. 271(1)(c) of the Act using the expression 'furnishing inaccurate particulars/concealment of income'. It was thus contended that apparently, the AO himself has not made any definite satisfaction towards the nature of charge leveled against the assessee required under s. 271(1)(c) r.w.s. 271(1B) of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty is sought to be initiated and thus suffers from vice of ambiguity. The show cause notice dated 10.01.2017 issued by the AO to the assessee is also completely silent about the nature of charge against the assessee. It is a mandate of law that satisfaction for the initiation of penalty proceedings should be arrived at during the course of any proceedings which could possibly be assessment, re-assessment or rectification proceedings but not during the penalty proceedings. The nature of charge proposed against the assessee is neither discernable from the assessment order nor form the penalty notice. The condition precedent for exercise of jurisdiction under s. 271(1)(c) r.w.s. 271(1B) of the Act is thus not satisfied in the instant case. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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