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TMI Blog2022 (7) TMI 78X X X X Extracts X X X X X X X X Extracts X X X X ..... on 271(1)(c) of the Act which is bad in Law and Invalid. 3. The Learned CIT(A) has erred in law and on facts in sustaining the order of the Assessing Officer levying penalty under Section 271(1)(c) of the Act amounting to Rs.12,00,000/-. 4. On the facts and in Law, the Ld. AO erred in not recording any satisfaction whatsoever much less as contemplated in Section 271(1B) before initiating and imposing penalty under Section 271(1)(c). 5. That any other relief/ deduction, which the Hon'ble Tribunal may deem fit be granted to the appellant. 6. That the appellant craves leave, to urge, add, amend, alter, enlarge, modify, substitute, and delete any of the Ground or Grounds and to adduce fresh evidence at the time of the hearing of the appeal. 4. The fact as culled out from the records that the assessee has efiled the Return of income on 31-08-2010 declaring total income of Rs. 12,85,579/ The assessee is doing business of MFG of HDP Pipes & Assembly of Sprinkler System. The scrutiny assessment completed u/s. 143(3) on 01-03-2013 determining total income of Rs. 67,14,940/-. 4.1 During the course of assessment proceedings it was noticed that the assessee has made payment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agricultural lands of the farmers and the nodal agency paying for such sale and installation is CG Rajya Beej Evam Krishi Vikas Nigam Ltd. The assessee could not produce any person, like the farmer or any authority from the agency or evidence in support of its claim. Summons u/s. 131 was issued to each recipient. When they attended it was noted that one of the person, Shri Navin Patel was the same person who had attended the hearings and produced books of the assessee as his accountant. To give the picture in a nut shell, none of the parties have undertaken any job from other parties. They have submitted reply that is the same in all the three cases. They have no machinery or paraphernalia for the work, in their words, only tools and tackles are required. As for the labour payment, they had to state that the skilled labours are required for manufacturing of HDPE Pipes and whereas for assembly of Sprinkler Irrigation System unskilled Labours are required. They used to engage casual workers from time to time. They do not have permanent labours, therefore, it was not possible for them to produce the labour before the A.O. Thus, the persons had no proof of actually doing any work in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese facts the assessee's objection raised is hereby rejected and the appeal is dismissed. 3.0 Appeal is dismissed. 6. During the course of hearing, Ld. AR took us through the relevant facts of the case vis-à-vis paper book filed on record and in support of legal ground, it is submitted that, the initiation as well imposition of penalty suffers from voice of non-application of mind of the Ld. AO and therefore, penalty deserves to be deleted. In so far as the merits of the case concern, Ld. AR contended that, the ld. CIT(A) has already allowed part of the disallowance made which itself proves that the assessee neither provided inaccurate particulars nor concealed the particulars of income and it is the mere disallowance of claim made by the assessee and thus, the levy of penalty even on merits required to be deleted considering the various judicial decision on account of mere disallowance of claim no penalty is leviable. 7. During the course of hearing the ld. AR appearing on behalf of the assessee drawn our attention to show cause notice bearing dated 01.03.2013 and 11.01.2017 wherein there was complete absentia of clear findings so as to charge under which limb t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax vs Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565. Section 271(1)(c): Omission by the AO to explicitly specify in the penalty notice as to whether penalty proceedings are being initiated for furnishing of inaccurate particulars or for concealment of income makes the penalty order liable for cancellation. The Karnataka High Court had to consider the following question of law. "Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case?" The High Court ruled in favour of the assessee with the following observations: "The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short 'the Act') to be bad in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short the Act') to be had in law as it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e.. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX-VS- MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed." 6. We find the SLP filed by the Revenue has been dismissed by the Hon'ble Apex Court. Further, the various Benches of the Tribunal following the above decisions are cancelling the penalty so levied by the Assessing Officer and confirmed by the ld. CIT(A) on account of non-s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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