INA BEARINGS INDIA PVT. LTD,,PUNE vs. DEPUTY COMMISSIONER OF INCOME TAX,, PUNE

Before going into the merits of said levy of penalty under section 271(1)(c) of the Act, we refer to the satisfaction recorded by the Assessing Officer while initiating penalty proceedings. The Assessing Officer vide para 8 had held that Since the assessee has furnished inaccurate particulars of its income, penalty proceedings u/s 271(1)(c) of the I.T. Act are being initiated separately. While levying penalty, the Assessing Officer vide para 8 of penalty order had held that The assessee case is therefore, hit by the provisions contained in Explanation 1 to section 271(1)(c) of the Act and penalty under section 271(1)(c) of the Act is leviable. In view of non recording of proper satisfaction by the Assessing Officer while initiating penalty proceedings under section 271(1)(c) of the Act, wherein penalty was initiated for furnishing of inaccurate particulars of income and thereafter levied penalty for concealing the income; we find that in the absence of proper satisfaction being recorded and

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. Accordingly, we delete the penalty levied under section 271(1)(c) of the Act in both the appeals. The grounds of appeal raised by assessee in both the appeals are thus, allowed.

In the result, both the appeals of assessee are allowed.