TMI Blog2021 (4) TMI 458X X X X Extracts X X X X X X X X Extracts X X X X ..... M/S SSA'S EMERALD MEADOWS [ 2016 (8) TMI 1145 - SC ORDER] As relying on M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, [ 2013 (7) TMI 620 - KARNATAKA HIGH COURT] 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 notice has been issued, the penalty proceedings initiated u/s 271(1)(c) are not sustainable. - Decided in favour of assessee. - ITA No.3061/Del/2017 - - - Dated:- 9-4-2021 - Shri R.K. Panda, Accountant Member And Shri Sudhanshu Srivastava, Judicial Member For the Appellant : Sh. S.K. Gupta, CA For the Respondent : Sh. H.K. Choudhary, CIT-DR ORDER PER R.K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 23.12.2016 of the learned CIT(A)-22, New Delhi, relating to Assessment Year 2009-10. 2. Facts of the case, in brief, are that the assessee is private limited company, engaged in the business of share, commodity trading and investment activities. It filed its return of income on 29.09.2009, declaring loss of ₹ 2,20,67431/-. The Assessing Officer completed the assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aw and is liable to be quashed. 5. That the CIT(A) has erred in law and on facts in not appreciating that additions made by the A.O. in quantum proceedings on account of unsecured loan being treated as income do not attract penalty provisions. 6. That the CIT(A) has erred in law and on facts in not appreciating that addition of unsecured loan received by the appellant is a highly debatable and contentious issue and hence no penalty u/s 271(l)(c) can be levied. 7. That the penalty order u/s 271(l)(c) is against the well established norms and jurisprudence of penalty under the IT Act and against various decisions of ITAT, High Court and Supreme Court. 8. That the CIT(A) has grossly erred in holding that the appellant had suppressed material facts and has further erred in holding that the appellant is liable under Explanation 1 to Sec 271 . 9. That the explanations filed before the A.O and the material available on record has not been properly considered and legally interpreted. The penalty imposed cannot be justified by any material on record. 5. The learned counsel for the assessee strongly challenged the order of the CIT(A) in confirming the penalty so ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i. CIT v. Samson Perinchery 392 ITR 4 (Bombay); ii. Manu Bali v. ACIT [ITA/790/DEL/2016; decision dated 05.10.2017]; iii. Vijay Agarwal v. DCIT [ITA/5432/DEL/2016; decision dated 05.11.2019]; iv. Sanjay Mittra vs. DCIT [ITA No.5206/Del/2016, order dated 01.10.2018]; v. DCIT vs. Gellette Diversified Operations Pvt. Ltd. [ITA No.4585/Del/2015] and vice versa [ITA No.3238/Del/2015], order dated 25th April, 2019 for A.Y. 2011-12. 6. He further submitted that a perusal of the assessment order shows that while making addition of ₹ 2,47,06,820/-, there is no satisfaction whatsoever of the default committed within the meaning of section 271(1)(c) and the relevant limb of default appears in the assessment order. He submitted that recording of satisfaction is sine qua-non for valid initiation of penalty proceedings which is evident from the wording of sec 271(1) of the Act which places emphasis on the satisfaction by the AO while initiating penalty proceedings. He submitted that in absence of any satisfaction of recording nature of default by the AO in the assessment order qua this addition, the penalty cannot be imposed on such addition. Referring to the decision of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... edit were furnished before the Assessing Officer and therefore, it cannot be said that it is a case of furnishing of inaccurate particulars of income. Relying on various decisions, he submitted that although the addition has attained finality in quantum proceedings, the assessee can always make a new plea during the penalty proceedings. He, accordingly, submitted that both legally and factually penalty so levied by the Assessing Officer and sustained by the learned CIT(A) is not justified. 9. Learned DR, on the other hand, strongly supported the order of the Assessing Officer and the CIT(A). He submitted that the Assessing Officer has initiated penalty proceedings after recording satisfaction. Referring to the copy of the notice issued u/s 274 r.w.s 271 of the Act on 30.12.2011, he submitted that there is tick mark against have concealed the particulars of income or furnished inaccurate particulars of such income in terms of Explanation 1, 2, 3, 4 and 5 . This shows that Assessing Officer has put the tick mark for concealment of particulars of income, therefore, the argument of the learned counsel for the assessee that the Assessing Officer has not mentioned under which limb of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eported in 73 taxmann.com 248, while dismissing the SLP filed by the Revenue quashing the penalty by the Tribunal as well as by the Hon ble Delhi High Court on the ground that the penalty notice does not specify under which limb the penalty has been levied has held as under:- Section 274, read with section 271(1)(c), of the Income-tax Act, 1961 - Penalty - Procedure for imposition of (Conditions precedent) - Assessment year 2009-10 - Tribunal, relying on decision of Division Bench of Karnataka High Court rendered in case of CIT v. Manjunatha Cotton Ginning Factory [2013] 359 1TR 565/218 Taxman 423/35 taxmann.com 250, allowed appeal of assessee holding that notice issued by Assessing Officer under section 274 read with section 271 (1 )(c) was bad in law, as it did not specify under which limb of section 271 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income - High Court held that matter was covered by aforesaid decision of Division Bench and, therefore, there was no substantial question of law arising for determination - Whether since there was no merit in SLP filed by r ..... X X X X Extracts X X X X X X X X Extracts X X X X
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