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Income Tax Appellate Tribunal, “B” BENCH, PUNE
Before: SHRI D. KARUNAKARA RAO, AM & SHRI LALIET KUMAR, JM
ORDER
PER D. KARUNAKARA RAO, AM:
This appeal filed by the assessee is against the order of the CIT(A)-1, Pune dated 13.09.2017 for the assessment year 2009-10.
The effective ground raised
by the assessee is as under :- “1) On the facts and circumstances of the case and in law the Ld. CIT(A) was not justified in confirming the penalty levied under section 271(1)(c) of the Act which was so levied by the A.O. without considering the proper limb of S.271(1)(c) as to whether “concealment” or furnishing inaccurate particulars of income”. The penalty levied and confirmed is not sustainable in law. In view of settled law in the matter. The penalty levied be deleted.”
3. Briefly stated the relevant facts include that the assessee is a company and engaged in the business of fire fighting equipments and installation of the same at the sites of the customers. The assessee filed the return of income declaring total income of Rs.40,16,422/-. At the end of the assessment u/s 143(3) r.w.s. 147 of the Act, the Assessing Officer assessed the total income of the assessee after making addition of Rs.2,12,919/- on account of non- establishment of genuineness of the purchase bills. Assessing Officer determined the total income of the assessee at Rs.42,29,340/-. Further, the Assessing Officer initiated the penalty proceeding stating that “Penalty proceedings under section 271(1)(c) of the Act is being initiated separately by way of issuing of notice for concealment of income.”. (para 3.1 of the assessment order).
4. In the penalty order, the Assessing Officer clearly stated that the levy of penalty is for the default of “..........concealing the particulars of income by not declaring income of Rs.2,12,919/-” (para 6 of the penalty order).
5. The CIT(A) confirmed the penalty as levied by the Assessing Officer. The contents of para 6 onwards of the appellate order are relevant in this regard.
Aggrieved with the said decision of the CIT(A), the assessee is in appeal before the Tribunal with the above extracted ground.
According to the ld. AR, the order of the CIT(A) shall have to be set- aside on the legal issue relating to the ambiguity in the mind of the Assessing Officer while dealing with the initiation and levy of penalty. Highlighting the legal requirement of making a specific reference to the specific limb of clause (c) of section 271(1) of the Act and relying on various binding judgments in the case CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom.) as well as the judgment of Hon’ble Karnataka High Court in the case of CIT Vs. Manjunatha Cotton and Ginning Factory 359 ITR 565, Ld. Counsel demonstrated that the penalty levied by the Assessing Officer is unsustainable in law and the same is wrongly upheld by the CIT(A). 8. On the other hand, ld. DR for the Revenue heavily relied on the orders of the authorities below. 9. We heard both the parties on this legal issue and also perused the material available on record. We find that this is a case where the Assessing Officer failed to record proper satisfaction while initiating and levying the penalty u/s 271(1)(c) of the Act. In this regard, we pursed the orders of the Revenue authorities. On perusal of para 3.1 of the assessment order, we find the following is the reasons for initiation of penalty proceedings :- “Penalty proceedings under section 271(1)(c) of the Act is being initiated separately by way of issuing of notice for concealment of income.”
Further, we also perused the penalty order passed by the Assessing Officer on 18.04.2016. On perusal of penalty order, we find the following is the reasons for levy of penalty u/s 271(1)(c) of the Act :- .......... concealing the particulars of income by not declaring income “6. of Rs.2,12,919/-”