TMI Blog2021 (6) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... e not sustainable in the eyes of law. Consequently, ld. CIT(A) has rightly deleted the penalty levied by the AO. Finding no illegality or perversity in the impugned order, appeal filed by the Revenue is hereby dismissed. - ITA No.4637/Del./2016, CO No.327/Del/2016 (in ITA No.4637/Del./2016) - - - Dated:- 27-5-2021 - Shri O.P. Kant, Accountant Member And Shri Kuldip Singh, Judicial Member For the Assessee : None For the Revenue : Ms. Pramita M. Biswas, CIT DR ORDER PER KULDIP SINGH, JUDICIAL MEMBER : Since common questions of facts and law have been raised in the aforesaid appeal and cross objections, the same are being disposed off by way of composite order to avoid repetition of discussion. 2. Appellant, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ents. The Worthy CIT (A) has quashed the imposition of penalty by considering only one tangent. The imposition of penalty deserves to be declared a nullity on other tangents of Sec 271(1)(c) also. 4. Briefly stated the facts necessary for adjudication of the controversy at hand are : On the basis of assessment order framed under section 153A read with section 143(3) of the Act at an income of ₹ 10,06,10,680/- i.e. at the declared income in the return of income filed in response to the notice issued u/s 153A of the Act, Assessing Officer (AO) initiated the penalty proceedings u/s 271(1)(c) of the Act on the ground that if the proceedings u/s 153A of the Act were not initiated then income to the tune of ₹ 10,05.53,048/- would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 9. In the backdrop of the aforesaid facts and circumstances of the case, order passed by the lower authorities and arguments addressed by the ld. DR for the Revenue, 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? 10. Ld. DR for the Revenue challenging the impugned order passed by the ld. CIT (A) relied upon the order passed by the AO and contended that this is a case of furnishing of inaccurate particulars of income by the assessee because in the initial return of income e-filed u/s 139 of the Act, assessee claimed loss of ₹ 57,632/- but, subsequently in response to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... parately. 12. When we examine para 8 of the penalty order passed in this case it contains the finding that I hold the assessee in default for furnishing inaccurate particulars of his income and sought to cover this case within the sweeping provisions of Explanation 1 appended to section 271(1)(c) of the Act. 13 Again, we are constrained to record that when there is invalid satisfaction of the AO that, penalty proceedings u/s 271(1)(c) of the Act is initiated separately rather it is no satisfaction because neither Explanation 1 of section 271(1)(c) of the Act was invoked while recording the satisfaction nor it is brought on record as to whether he is initiating the proceedings for concealment of particulars of income or fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t all, penalty is to be imposed, it should be imposed only on the grounds on which he is called upon to answer. It is not open to the authority, at the time of imposing penalty to impose penalty on the grounds other than what assessee was called upon to meet. Otherwise though the initiation of penalty proceedings may be valid and legal, the final order imposing penalty would offend principles of natural justice and cannot be sustained. Thus once the proceedings are initiated on one ground, the penalty should also be imposed on the same ground. Where the basis of the initiation of penalty proceedings is not identical with the ground on which the penalty was imposed, the imposition of penalty is not valid. The validity of the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for furnishing inaccurate particulars of income. The standard proforma without striking of the relevant clauses will lead to an inference as to non-application of mind. 15. In view of what has been discussed above, we are of the considered view that when the AO has failed to apply his mind while recording satisfaction at the time of framing assessment to initiate the penalty proceedings u/s 271(1)(c) of the Act as to under which limb of section 271(1)(c) of the Act i.e. for concealing of particulars of income or furnishing of inaccurate particulars of income, such penalty proceedings initiated on the basis of vague and ambiguous satisfaction are not sustainable in the eyes of law. Consequently, ld. CIT(A) has rightly deleted the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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