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TMI Blog2024 (6) TMI 1141X X X X Extracts X X X X X X X X Extracts X X X X ..... s 271(1)(c) of the Act by AO wherein the penalty of Rs. 1,21,855/- was imposed for concealing the income. 3. Facts in brief are that the assessee filed return of income on 31.08.2012 declaring total income of Rs. 2,13,640/-. Subsequently, the case of the assessee was reopened u/s 147 of the Act by issuing notice u/s 148 of the Act on the ground that the assessee has claimed long term capital gain on sale of shares of M/s Quest Financial Services Ltd. to the tune of Rs. 6,70,390/- as exempt u/s 10(38) of the Act. In the assessment proceedings, the assessee offered the said amount of capital gain to tax by filing a revised computation which has been extracted by the AO in para 4 of the assessment order and finally in para 5, the AO noted tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hereafter the AO simply brought the said capital gain to tax and initiated the penalty proceedings u/s 271(1)(c ) without recording any satisfaction framing the charge whether the initiation of penalty proceedings was for concealment of income or for filing inaccurate particulars of income though in the notice issued u/s 271(1)(c) dated 18.12.2019 the AO stated that "It appears that you have concealed the particular income". Thus it clear from the above that the AO was himself not sure as to the charge of penalty. In our opinion, the said approach of the AO in making assessment without framing the charges and issuing notice without being sure as to levy of penalty on particular charge is not permissible under the Act. This is undisputed tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... imply imposed penalty for furnishing inaccurate particular of income. In our opinion, the assessment proceedings are distinct and different from the penalty proceedings. In this case, the AO has only issued show cause notice to the assessee and then proceeded to impose the penalty by ignoring the fact that the assessee has made disclosure of income during survey and has also not contested the issue in appeal. Further we note that AO has passed an order in a very cryptic manner. In our opinion, the addition is only on the basis of admission of the assessee and the AO nowhere demonstrated that the claim of the assessee was either found to be false either during assessment proceedings or during penalty proceedings. The case of the assessee fin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e. (a) Trading of shares was done through broker in a recognized stock exchange. (b) Payment and receipt is through banking channel. (c) Documentary evidence for transactions like contract note, demat statement, and bank statement are enclosed. (d) We offered the loss voluntarily to avoid litigation and requested the Assessing Officer to not initiate penalty proceedings u/s 271(1)(c). (e) We paid the tax due and challan copy is enclosed. (f) No appeal is filed. In addition, the assessee referred to various case laws. These documents have not been held as false either by the ld. Assessing Officer during the assessment proceeding or during penalty proceeding. Therefore, the assessee does not deserve to be visited with penalty." In the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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