SHRINIWAS VITTHAL SIDDAM,,AHMEDNAGAR vs. INCOME-TAX OFFICER, WARD - 2,, AHMEDNAGAR

The assessee has raised the following grounds of appeal:- 1. On the facts and the circumstances of the case and in law, the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the penalty levied under section 271(1)(c) of the Act by holding that the Assessing Officer was justified in levying the penalty. 2. On the facts and the circumstances of the case and in law, the Penalty Order passed in this case levying penalty of Rs.3,06,100/- u/s 271(1)(c) of the Income Tax Act is without jurisdiction, ab-initio-void and legally unsustainable.

Despite service of notice, none appeared on behalf of assessee nor any application was moved for adjournment. Because of the issue involved, we proceed to decide the present appeal after hearing the learned Departmental Representative for the Revenue.

The only issue raised in the present appeal is against levy of penalty under section 271(1)(c) of the Act.

Briefly, in the facts of the case, the assessee had filed return of income declaring total income of ₹ 1,59,500/-. The case of assessee was picked up for scrutiny and addition of ₹ 11,51,000/- was made in the hands of assessee on account of Long Term Capital Gains. The Assessing Officer while recording satisfaction for initiating penalty proceedings has failed to mention specific charge i.e. for concealment of income or furnishing of inaccurate particulars of income. Similarly, in penalty order also it has failed to mention the specific charge and in the absence of the same, order passed for levy of penalty cannot stand.

We find support from the ratio laid down by the Hon’ble Bombay High Court in CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom), wherein it was held that where there is no proper satisfaction for initiating penalty proceedings and in the absence of proper show cause notice to the assessee, there is no merit in levy of penalty. In the present case, Assessing Officer has failed to conclude which limb of section 271(1)(c) of the Act is applicable, hence order suffers from infirmity. Accordingly, we delete the penalty levied under section 271(1)(c) of the Act. The grounds of appeal raised by assessee are thus, allowed.

In the result, the appeal of assessee is allowed.