TMI Blog2021 (7) TMI 94X X X X Extracts X X X X X X X X Extracts X X X X ..... hout specifying if the assessee has furnished concealment of particulars of income or has furnished inaccurate particulars of income. Even at the time of passing of penalty order, AO was not clear enough as to whether he is going to levy the penalty for concealment of particulars of income or has furnished inaccurate particulars of income. AO was required to satisfy himself as to under which limb of section 271(1)(c) of the Act he is initiating the penalty proceedings and only thereafter penalty can be levied. In the instant case, AO was neither satisfied/aware at the time of recording a satisfaction in the assessment order nor he was clear enough at the time of penalty proceedings as to under which of the limb of section 271(1)(c) he is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 271 of the Income-tax Act, 1961 (for short the Act ). Declining the contentions raised by the assessee that the assessee company had received consultancy income of ₹ 4,79,51,780/- during the year under assessment which was reflected under grouping other income , Schedule 12 of the balance sheet and also without appreciating the fact that the assessee has been maintaining office of 11,600 sq.ft. and have employed 60 employees approximately, proceeded to levy the penalty for addition of ₹ 2,06,38,449/- for concealment of income and furnishing of inaccurate particulars of income. 3. Assessee carried the matter before the ld. CIT (A) by way of filing the appeal who has deleted the penalty by allowing the appeal. Feeling aggrie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inaccurate particulars of income during assessment proceedings? 8. Ld CIT (A) deleted the penalty levied by the AO under section 271(1)(c) of the Act by returning following findings :- 6. I have considered the reasoning of the Assessing Officer and the submissions of the appellant. 6.1 All the grounds of appeal relate to imposition of penalty amounting to ₹ 70,15,008/- u/s 271(1)( c). From item No.5 of Para 4 above its observed that even though the Assessing Officer acknowledged the submissions made by the appellant in response to notice u/s 271(1)(c) dated 27.12.11, he has rejected the contention raised by the assessee without either reproducing the said contention in his order or commenting upon it. It is also obser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal. Consequently, in the quantum appeal the addition on account of depreciation was not considered by me on merits. 6.6 However, given that substantial consultancy receipts were earned by the appellant through the work done by a large number of people, it is natural that the assets would have been put to use. I do not intend to penalise the appellant merely for showing the receipts for consultancy as other Income. The penalty has to be deleted. 7. As regards denial of business loss carried forward amounting to ₹ 98,94,864/-, again, even though the merits of the addition were not examined during the quantum appeal as yet the return of income was filed late, the business loss was not to be allowed to be carried forward. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (SC) decided the identical issue in favour of the assessee. Operative part of which is reproduced for ready reference as under :- A glance at the provisions of section 271(1)(c) of the I.T. Act, 1961 suggests that in order to be covered by it, there has to be concealment of the particulars of the income of the assessee. Secondly, the assessee must have furnished inaccurate particulars of his income. The meaning of the word particulars used in section 271(1)(c) would embrace the detail of the claim made. Where no information given in the return is found to be incorrect or inaccurate, the assessee cannot be held guilty of furnishing inaccurate particulars. In order to expose the assessee to penalty, unless the case is strictly cover ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome. 12. Even at the time of passing of penalty order, AO was not clear enough as to whether he is going to levy the penalty for concealment of particulars of income or has furnished inaccurate particulars of income. AO was required to satisfy himself as to under which limb of section 271(1)(c) of the Act he is initiating the penalty proceedings and only thereafter penalty can be levied. In the instant case, AO was neither satisfied/aware at the time of recording a satisfaction in the assessment order nor he was clear enough at the time of penalty proceedings as to under which of the limb of section 271(1)(c) he is going to levy the penalty. 12. In view of what has been discussed above, we find no illegality or perversity in the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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