SOUMITRA G. WADALKAR,MUMBAI vs. DCIT 26(2), MUMBAI

Before me, at the outset, Ld Counsel for the assessee briefly narrated the background facts of the case and brought our attention to para 3 of the assessment order and read out the following. “3.......penalty proceedings u/s 271(1)(c) read with section 274 of the Income Tax Act, 1961 are initiated for concealment of the income and furnishing the inaccurate particulars of his income.”

Further, bringing our attention to the penalty order dated 29.8.2013, Ld Counsel for the assessee read out the operational para 3 and 6 which again read as under:-

I am therefore, satisfied that the assessee has furnished inaccurate particulars of income and concealed income within the meaning of section 271(1)(c) of the Act as discussed above.....”

Further also, Ld Counsel for the assessee brought our attention to the actual penalty notice issued to the assessee and mentioned that the officers ticked both the limbs of the clause (c) of notice u/s 271(1) of the Act. Summing up all the above, Ld Counsel for the assessee submitted that the officer are ambiguous about the reason for which the penalties are levied u/s 271(1)(c) of the Act.

After hearing both the parties and on perusal of the orders of the Revenue Authorities, I find, there is no clarity in the minds of the Revenue Authorities, whether the amount involved is a case of “concealment of income” or “furnishing of inaccurate particulars of income”. In such circumstances, the assessee is entitled to relief considering the binding judgment of Hon‟ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn.) will also help the assessee. For all the above reasons, I find, the penalty levied by the AO and confirmed by the CIT (A) is not legally sustainable. Accordingly, grounds raised