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TMI Blog2022 (5) TMI 734X X X X Extracts X X X X X X X X Extracts X X X X ..... dealings in land and also agency business in land on commission basis. Return of income was furnished u/s 139(1) of the Act declaring total income at Rs.23.15 lakh. Search and seizure action was taken against the assessee on 24-02-2008, pursuant to which the assessee filed return u/s.153A for the year under consideration declaring total income of Rs.89.21 lakh. The Assessing Officer (AO) completed the assessment u/s.153A determining total income at Rs.8.50 crore and odd. Penalty proceedings were initiated by means of a mention in the assessment order. Thereafter, penalty order was passed u/s.271(1)(c) on 30-09-2015 levying penalty of Rs.39,54,378/- on two items of additions. The ld. CIT(A) issued enhancement notice by observing that the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... permissible deduction is denied, we do not see any reason why the assessee should be prevented from raising that question before the tribunal for the first time, so long as the relevant facts are on record in respect of that item". Answering the question posed before it in affirmative, their Lordships held that on the facts found by the authorities below a question of law arises (though not raised before the authorities) which bears on the tax liability of the assessee and the Tribunal has jurisdiction to examine the same. We are, therefore, admitting such additional grounds. 5. Espousing the additional grounds for disposal, it is seen that the AO in the assessment order observed that the assessee has filed original return u/s.139 on 31-1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f income' in terms of section 271(1)(c) of the Act. The second addition, which constitutes the foundation of the penalty, is the payment of on-money on purchases transactions of lands. The AO made addition at Rs.2.94 crore by treating 61% as on-money paid on purchase transactions of lands. The ld. CIT(A) reduced this percentage to 30%. The Tribunal further reduced it to 20%, which led to restricting the addition to Rs.65.53 lakh. This addition is again in the realm of `furnishing of inaccurate particulars of income'. Thus, both the additions, constituting the bedrock of the penalty, are in the nature of 'furnishing of inaccurate particulars of income' and not `concealment of particulars of income'. 6. Now we turn to notice issued by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, the penalty was vitiated. The SLP of the Department against this judgment has since been dismissed by the Hon'ble Supreme Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. (2021) 124 taxmann.com 249 (SC). 8. In view of the overwhelming legal position, it is clear that where the charge is not properly set out in the notice u/s 274, viz., both the limbs stand therein without striking off the inapplicable limb, the penalty order gets vitiated. Turning to the facts of the extant case, we find from the notice u/s 274 of the Act that the AO retained both the limbs, whereas penalty was imposed only with reference to one of them. Respectfully following the above Full Bench judgment of the Hon'ble jurisdictional High Court, we ov ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... neither refer to such additional income nor considered such an amount of income at the time of levy of the penalty. 11. Having heard the rival submissions and gone through the relevant material on record, it is clear from the language of section 271(1) that the Commissioner (Appeals), inter alia, is also empowered to levy penalty u/s.271(1)(c) of the Act. There can be two situations, viz., one where the CIT(A) enhances the income in the quantum appeal and consequently imposes additional penalty u/s 271(1)(c) and second, where the CIT(A) enhances the penalty already imposed by the AO de hors any enhancement made by him in the quantum proceedings, of course, subject to rider that he cannot travel beyond the penalty order for making the enha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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