TMI Blog2021 (3) TMI 1381X X X X Extracts X X X X X X X X Extracts X X X X ..... present case the enhanced compensation and interest received thereon was taken into account but the Assessing Officer observed that the interest received on compensation or interest received on enhanced compensation is taxable under the income from other sources and will not come under the purview of the exemption under Section 10(37) - AO initiated penalty under Section 271(1)(c) as relating to concealment of income due to the fact that the assessee had not filed the return of income and never declared the compensation and the interest received thereon. Merely not filing the return of income cannot amount to concealment of income. Therefore we are taking up the contention of the assessee that there is no particular limb mentioned in the no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces of the case and the same is not sustainable o various legal and factual grounds. 3. That having regard to the facts and circumstances of the case; Ld. A.O. has erred in law and on facts in imposing a of R 4,97,500/- that too without recording mandatory satisfaction as per law. 4. That having regard to the facts and circumstances of the case Ld. A.O. has erred in law and on facts in that penalty notice was vague and inapplicable clause was not struck off. 5. That having regard to the facts and circumstances of case, Ld. A.O has erred in law and on facts in imposing penalty without giving an adequate opportunity of being heard and by not observing the principles of natural justice. 3. The assessee is agriculturis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 274 of the Act. The Ld. AR submitted that whether the penalty is for concealment of income or furnishing of inaccurate particulars of income was not evident from the notice nor from the penalty order as well. The Ld. AR further submitted that the penalty provision being quasi judicial, unless there is specific charge there cannot be levy of penalty. Therefore, the order levying penalty is wrong and bad in law. The Ld. AR relied upon the decision of the Hon ble Supreme Court in case of CIT vs. SSA s Emerald Meadows (2016) 73 Taxman.com 248 (SC) and CIT v. Manjunatha Cotton Ginning Factory (2013) 359 ITR 565 (Kar). The Ld AR further submitted that the Hon ble Delhi High Court in case of Pr. CIT Vs. M/s. Sahara India Life Insurance Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or furnishing of inaccurate particulars of income. From the notice dated 14/02/2014 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which limb of provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. In the present case the enhanced compensation and interest received thereon was taken into account but the Assessing Officer observed that the interest received on compensation or interest received on enhanced compensation is taxable under the income from other sources and will not come under the purview of the exemption under Section 10(37) of the Act. Thus, the Assessing Officer initiated penalty under Section 271(1)(c) of the Act as relating to conc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed. Thus, Additional Ground No. (ii) of the assessee's appeal is allowed. Since the inception of the notice issued u/s 271(1)(c) has become null and void, there is no need to comment on merit of the case. The Penalty u/s 271(1)(c) of the Act is quashed. Since in the instant case also the inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted. Although the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... urt is unable to find any error having been committed by the ITAT. No substantial question of law arises. The reliance of the Ld. DR in respect of Sunderam Finance Ltd. (supra) cannot be taken into account in toto in the present case as the jurisdictional High Court in case of Sahara India Life Insurance Co. Ltd. (supra) has clearly set out the necessity of the actual provisions for which the penalty is issued by the Revenue. Thus, notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. We, therefore, set-aside the order of the CIT(A) and direct the Assessing Officer to cancel the penalty so levied. 8. In result, the appeal of the assessee is allowed. Order pronounced in the Open Court in presence of both the pa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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