SH. VIKAS,MEERUT vs. ITO, MEERUT

PER DIVA SINGH, JUDICIAL MEMBER :

1) That the penalty as imposed by the AO and sustained by the CIT (A) u/s 271(1)(c) at Rs.11.45,666/- is invalid, arbitrary, unjust and bad in law. 2) That in the absence of specific charge which is the penalty has been levied for concealment of furnishing of inaccurate particular of his income, the levy of penalty u/s 271(1)(c) at Rs.11,45,666/- by AO and sustained by CIT (A) is arbitrary, unjust and bad in law and at any rate very excessive. 3) That the en (A) has erred on fact and under the law making observation that after the introduction of sub section 1. B to section 271, the alleged satisfaction as recorded by the AO is sufficient for assumption of jurisdiction to imposed the penalty. 4) That in the absence of any contrary material about the identity, genuineness of transaction and creditworthiness of cash creditors, the imposition of penalty by the AO merely on account of non acceptance of explanation furnished by assessee and merely on the ground that the addition u/s 68 has been affirmed by CIT (A) is arbitrary, unjust and bad in law and at any rate very excessive. 5) That the observation of CIT (A), which was the basis of confirmation of penalty that "wherever there is difference between the returned and assessed income, there is an inference of concealment as a Rule of law" is untenable and against the law and consequently the penalty as imposed by the AO and sustained by CIT(A) is arbitrary, unjust and bad in law.”

2. At the time of hearing, ld. AR for the assessee invited attention to the assessment order and referring to the same, it was his submission that for the penalty invoked, no specific charge was spelt out by the AO. Similarly, inviting attention to the copy of the penalty order dated 01.05.2013, it was his submission that the penalty has been imposed again without specifying the specific charge. Inviting attention to the impugned order, it was his submission that the specific objection was raised before the CIT (A) and reliance was placed upon the position of law as addressed by Hon’ble Gujarat High Court in case of New Soraphahia Engineering Company vs. CIT – (2006) 282 ITR 642; N.M. Subramanium – 97 ITR 228; D.M. Manasvi vs. CIT – 86 ITR 553 (SC); Ranjan & Company – 291 ITR 340 (Delhi); Hon’ble Delhi High Court in CIT vs. Ram Commercial Enterprises Ltd. – (1998) 246 ITR 568; Hon’ble High Court of Madhya Pradesh in CIT-II vs. Praveen B. Gada (HUF) – 2012) 211 Taxman 166 (M.P.) dated 17.02.2011; and Hon’ble Karnataka High Court in CIT vs. Manjunatha Cotton & Ginning Factory – (2013) 218 Taxman 423 dated 13.12.2012. It was his submission that the penalty order confirmed by the CIT (A) deserves to be set aside in terms of the decision of the Hon’ble Apex Court in S.S. Emerald. Specific attention was invited to copy of the notice issued u/s 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’), placed at pages 38 & 39 of the Act so as to point out that in the two notices issued dated 12.12.2011 and 28.03.2013, the AO has not scored off and/or either/or no specific charge not been spelt out. In the circumstances, in terms of the judicial precedent, it was his submission that the penalty order may be quashed. Even on merits, it was his submission that simply because addition has been accepted by the assessee who initially had challenged the impugned order before the CIT (A) but ultimately did not agitate the issue further. This fact by itself is not a ground for levy of penalty.