ASHOK KUMAR GROVER,DELHI vs. ACIT CIRCLE-61(1),DELHI, DELHI

The matter relates to an order of penalty imposed on the assessee dated 29.11.2016 issued by the ACIT, Circle-6191), New Delhi, whereby and whereunder minimum penalty of Rs.2,85,105/-

At the time of hearing of the instant appeal the Learned Counsel for the assessee submitted before us that the Assessing Officer has initiated the proceedings by issuing notices dated 29.11.2016 on the alleged ground of concealment particulars of income and furnishing the inaccurate particulars of income as well, the copies whereof has been duly submitted before us. Further that while imposing penalty on 07.12.2021 Ld. AO alleged furnishing inaccurate particulars of income by the assessee as recorded therein. Under this fact and circumstances of the matter, he argued that recording of satisfaction by the Assessing Officer that there was concealment of income or furnishing inaccurate particulars of income by the assessee though sine qua non for initiation of penalty proceedings, the same has not been adhered to, rather the reasons first recorded on 29.11.2016 is on both the limbs. It is a settled principle of law that the Assessing Officer should issue notice against the assessee alleging violation of provision under Section 271(1)(c) of the Act and in this particular case the Assessing Officer was not sure while issuing show cause notice under Section 271(1)(c) of the Act whether he had to proceed on the basis of concealment of income or furnishing inaccurate particulars of the said income as is evident from the order dated 29.11.2016. The initiation of proceedings is violation of the prescribed provision under Section 271(1) (c) of the Act and thus

Keeping in mind the fact of the matter, the judgments passed relied upon by the Learned AR have been duly considered by us which are found to be on the same line. In the judgment passed by the Hon’ble Supreme Court in the case of Golden Peace Hotels and Resorts(P) Limited (supra) that in the absence of specific recording by the Learned A.O. of satisfaction alleging either there was concealment of income or inaccurate particulars of income furnished by the assessee penalty proceedings ordered to be dropped by the Hon’ble High Court was upheld.

Further that in the case of CCIT Vs Shyam Sunder Jindal the Hon’ble High Court quashed the penalty proceedings initiated under Section 271(1)(c) in the absence of any specific limb under Section 271(1)(c) of the Act having been mentioned by the Assessing Officer in issuing the notice against the assessee. It is relevant to mention that the submission made by the Learned AR has not been able to be controverted conceal by the Learned DR neither the Learned DR

Thus having heard the Learned Counsel appearing for the parties, having regard to the facts and circumstances of the matter particularly the notice dated 29.11.2016 issued under Section 271(1)(c) of the Act by the ACIT, Circle-61(1) New Delhi without mentioning specific limb under that particular provision of law which is sine qua non for initiating penalty proceedings against the assessee as observed by the Hon’ble Apex Court, the said notice is found to be non-maintainable, invalid. Under this facts and circumstances of the matter the proceedings is also therefore, found to be void, ab-initio and thus quashed.

The assessee’s appeal is therefore allowed.