REVIEW VENTURES LLP (FORMERLY-REVIEW FINANCE PRIVATE LIMITED),MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(3)(1), MUMBAI

The only issue in this appeal of assessee is against the levy of penalty under section 271(1)(c) of the Act by the AO and confirmed by CIT(A). For this assessee has raised the first jurisdictional issue vide following ground No. 1: - “On the facts and circumstances of the case, the ld. CIT(A) erred in holding that the penalty order passed under section 271(1)(c) of the Income Tax Act, 1061 is void-ab-initio, invalid and bad in law."

At the outset, the learned Counsel for the assessee took us through the assessment order vide Para 4.5 which reads as under: - “4.5 Penalty proceedings under section 271(1)(c) are initiated separately for concealing/ furnishing inaccurate particulars of income.”

The learned Counsel for the assessee stated that the AO initiated the penalty proceedings while framing the assessment order on both the counts i.e. for concealing the particulars of income as well as for furnishing of inaccurate particulars of income in view of the above Para 4.5. Further, the learned Counsel for the assessee took us through the assessee’s paper book at page 53 and 54 wherein, notice under section 274 read with section 271(1)(c) of the Act is enclosed. The learned Counsel for the assessee drew our attention to the notice and stated that 3 the AO has not strike off the inappropriate words or paragraph and accordingly, AO is not clear about the specific charge for levy of penalty under section 271(1)(c) of the Act. According to the learned Counsel, the penalty is initiated for disallowance of depreciation. He narrated that the depreciation on residential property was claimed by Assessee Company at the rate of 10%, which is the depreciation rate for building used for business purposes. The learned Counsel admitted that in quantum the assessee has accepted the addition and not filed any appeal. On the other hand, the learned Sr. DR relied on the assessment order and the order of CIT(A) for confirmation of penalty.