TMI Blog2021 (7) TMI 804X X X X Extracts X X X X X X X X Extracts X X X X ..... income and furnishing of inaccurate particulars of income carry different connotations. Various High Courts have held that AO must indicate in the notice for which of the two limbs he proposes to impose the penalty and for this the notice has to be appropriately marked. If in a printed format of the notice the inapplicable portion is not struck off thus not indicating for which limb the penalty is proposed to be imposed, it would lead to an inference as to non application of mind, thus vitiating imposition of penalty. See M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [ 2019 (8) TMI 409 - DELHI HIGH COURT] - Decided in favour of assessee. - ITA Nos. 6453, 6454 & 6455/Del/2016 - - - Dated:- 20-7-2021 - Sh. Anil Chaturvedi, Accoun ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... controlling the group were Shri Satinder Singh Madhok his brother Shri Sandeep Singh Madhok. The case of the assessee was also covered u/s 132 of the Act. Consequent to the search action, notice u/s 153A was issued to the assessee and in response to which assessee filed his return of income for A.Y. 2010-11, declaring income of ₹ 1,04,03,178/- on 18.12.2012. Thereafter, the case was taken up for scrutiny and assessment was framed u/s 153A r.w.s 144 of the Act and the total income was determined at ₹ 22,48,03,670/-. Aggrieved by the order of AO, assessee carried the matter before CIT(A) who granted partial relief to the assessee. On the additions made by AO and that were upheld by CIT(A), AO vide penalty order dated 21.03.2016 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to add, alter, remove and modify any grounds of appeal, which are without prejudice to one another, before or at the time of hearing of the appeal. 7. Though various grounds have been raised by the assessee, we find that the sole controversy is w.r.t levy of penalty u/s 271(1)(c) of the Act. 8. Before us, Learned DR supported the order of lower authorities and pointing to the findings of CIT(A) submitted that CIT(A) has given a finding that assessee had made claims which were wholly untenable in law, without any basis and the explanations furnished by the assessee were without any basis. In such a situation, the AO was fully justified in levying penalty u/s 271(1)(c) of the Act. He therefore submitted that CIT(A) has ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urate particular of income. Thus the first step is to record satisfaction and come to a finding while completing the assessment as to whether the assessee has concealed its income or furnished inaccurate particulars of income. The AO thereafter has to levy penalty u/s 271(1)(c) of the Act for non-satisfaction of either of the limbs which gets attracted. Thereafter, notice u/s 274 r.w.s 271(1)(c) of the Act is to be issued to the assessee. The aforesaid notice should specifically indicate on what ground penalty is sought to be imposed, whether for concealment of income or for furnishing of inaccurate particulars of income. In the present case, the perusal of assessment order passed by the AO reveals that in the assessment order, no specific ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome or for furnishing of inaccurate particulars of income. The relevant portion of the findings of Hon ble High Court in the case of Sahara India Life Insurance Co. Ltd. (supra) reads as under: 21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka ..... X X X X Extracts X X X X X X X X Extracts X X X X
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