TMI Blog2022 (6) TMI 1246X X X X Extracts X X X X X X X X Extracts X X X X ..... ome. We overturn the impugned order on this legal issue and direct to delete the penalty imposed by the AO. - Decided against revenue. - ITA Nos. 1857 & 1858/PUN/2018 And ITA Nos. 1905, 1906 & 1907/PUN/2018 - - - Dated:- 27-6-2022 - Shri R.S. Syal, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Assessee : Shri Nikhil Pathak For the Revenue : Shri Sardar Singh Meena ORDER PER R.S. SYAL, VP : This batch of five appeals assails the common order passed by the ld. CIT(A) on 27.9.2018 partly confirming the penalty imposed by the Assessing Officer (AO) u/s.271(1)(c) of the Income-tax Act, 1961 (hereinafter also called the Act ) in relation to the assessment years 2008-09, 2009-10 an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d certain donations amounting to Rs.18,62,575/- which the assessee could not establish as corpus donations. Giving effect to the order passed by the Tribunal, the AO, vide his order dated 25-09-2017, determined total income at Rs.24,43,897/- comprising of the above two items, namely, foreign travelling expenses of Rs.5.81 lakh and donations of Rs.18.62 lakh. Before the taking up of the quantum appeal by the Tribunal, the AO espoused penalty proceedings u/s.271(1)(c) and imposed penalty of Rs.7,52,10,690/- on the amount of total income determined by him in his order passed u/s.143(3) at Rs.24.57 crore vide his order dated 13-03-2014. The assessee preferred appeal before the ld. CIT(A), who held that the penalty could be levied only on the ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty u/s.271(1)(c) of the Act. It is pertinent to note that the AO determined total income of the assessee at Rs.24.57 crore by considering the net profit as shown in the Income and Expenditure account at Rs.24.40 crore added by the disallowance of two expenses. The amount of profit taken by the AO as the starting point for determination of total income also includes the amount of donations received by the assessee credited to the Income and Expenditure account. Thus, it is overt that the additions made by the AO to the tune of Rs.24.57 crore, being, the total income computed by him as against Nil income returned by the assessee, fall in the territory of `furnishing of inaccurate particulars of income in the context of section 271(1)(c) of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 253 (Bom) has considered this very issue. Answering the question in affirmative, the Full Bench held that a defect in notice of not striking out the irrelevant words vitiates the penalty even though the AO had properly recorded the satisfaction for the imposition of penalty in the order u/s 143(3) of the Act. In another judgment, the Hon ble Bombay High Court in Pr.CIT Vs. Golden Peace Hotels and Resorts (P.) Ltd. (2021) 124 taxmann.com 248 (Bom) also took similar view that where inapplicable portions were not struck off in the penalty notice, it 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 taxma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the same way as that for the A.Y. 2008-09. The Tribunal, for the A.Y. 2009-10 also, restored the benefit of exemption u/s.11 and made similar two disallowances, namely, foreign travel expenses amounting to Rs.5,64,227/- for violation u/s.13(1)(c) and donations amounting to Rs.3.23 lakh. Giving effect to the order passed by the Tribunal, the AO, vide his order dated 04-01-2019, determined total income at Rs.8,87,227/-. However, the AO imposed penalty on the total income determined by him in the order passed u/s.143(3) immediately after the passing of the order by the ld. CIT(A) in quantum proceedings. The amount of penalty was determined at Rs.10.36 crore. When the penalty order came up for challenge before the ld. CIT(A), he directed the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be deleted. 11. In the result, the appeal of the assessee is allowed and that of the Revenue is dismissed. A.Y. 2010-11 : 12. This appeal by the Revenue is directed against the order passed by the CIT(A)-10 on 27-09-2018 deleting the penalty u/s.271(1)(c) of the Act in relation to the items of additions which were deleted by the Tribunal in the quantum proceedings. 13. Both the sides are in agreement that the facts of this appeal are mutatis mutandis similar to those of Revenue s appeals for the immediately preceding two years. Following the view taken herein above, we uphold the impugned order in deleting the penalty imposed by the AO u/s.271(1)(c) of the Act in respect of the items of additions deleted by the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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