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05-07-2019, Prem Kumar Sanghi, Section 271(1)(c), 271, Tribunal Jaipur

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6 days 13 hours ago #10001 by amit
Section - 271(1)(c), 271, 274
Order Date - 05-07-2019
Favouring - Assessee
Court - Tribunal Jaipur
Appellant - Prem Kumar Sanghi
Respondent - DCIT
Justice - RAMESH C. SHARMA, AM & VIJAY PAL RAO, JM
Citation - 719Taxpundit94
Appeal No. - ITA No. 291/JP/2018
Asstt. Year - 2010-11

Order

PER : R.C. SHARMA A.M

This is an appeal filed by the assessee against the order of ld.CIT(A)-I, Jaipur dated 10/11/2017 for the A.Y. 2010-11 in the matter of imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961 (in short, the Act). Grounds taken by the assessee reads as under:

“1. That the notice issued by the Assessing Officer U/s 274 r/w Sec. 271(1)(c) of the Income Tax Act, 1961 is wrong and bad in law inasmuch as it did not specify in which limb of Section 271(1)(c) of the Income Tax Act, 1961, the penalty proceedings has been initiated, i.e. whether for concealment of income or furnishing of inaccurate particulars of income.

2. That without prejudice to the ground No. 1 above on the facts and in the circumstances of the case, the ld. CIT(A) is wrong, unjust and has erred in law in confirming penalty to the extent of Rs. 1,15,875/- imposed by the ld. Assessing Officer U/s 271(1)(c) of the I.T. Act, 1961.

3. That the appellant craves the permission to add to or amend to any of the above grounds of appeal or to withdraw any of them.”

2. There is delay in filing the appeal. In support of the delay, the assessee has filed reasons in the form of affidavit. After going through the reasons, we are satisfied that there was reasonable ground for delay in filing the appeal. Accordingly, in the substantial interest of justice, the delay is condoned and appeal is being heard on merit.

3. Rival contentions have been heard and record perused. The facts in brief are that in the course of assessment U/s 147 read with Section 143(3) of the Act, an addition of Rs. 3,75,000/- was made in respect of cash paid for covered car parking, club house, generator etc. The addition was made on the plea that Shri Bimal Kumar Jain has surrendered the said amount and offered the same for tax in the statement recorded U/s 132(4) of the Act. The A.O. treated the said amount as undisclosed receipt by the assessee though the assessee categorically denied the receipt of said amount from Shri Bimal Kumar Jain. However, no other material was pointed out by the A.O. except oral testimony of Shri Bimal Kumar Jain surrendering the income. With respect of this addition, the A.O. has levied the penalty U/s 271(1)(c) of the Act which was confirmed by the ld. CIT(A) and against which the assessee is in further appeal before the ITAT.

4. It was argued by the ld AR of the assessee that the A.O. did not initiate penalty proceedings U/s 271(1)(c) of the Act specifically in respect of addition of Rs. 3.75 lacs in assessment order while specifically penalty proceedings U/s 271(1)(c) was initiated “for filing inaccurate particulars, thereby concealing income” in respect of disallowance of deduction made U/s 80IB(10) of the Act. Our attention was invited at the last para of the assessment order wherein it was stated that “penalty proceedings are being initiated separately U/s 271(1)(c) of the Act for concealing and filing inaccurate particulars of income.” Our attention was invited to the order of the ld. CIT(A) wherein the addition made by disallowing claim of deduction U/s 80IB(10) of the Act was allowed by the ld. CIT(A) which has been confirmed by the ITAT as well as the Hon’ble High court by dismissing the appeal of the department. The ld AR has further argued that the penalty is bad in law as notice issued U/s 274 r.w.s. 271(1)(c) of the Act is improper and invalid, in so far as in the assessment order, the A.O. held in last para of the order that “penalty proceedings are being initiated separately u/s 271(1)(c) of the Act, 1961, for concealing & filling inaccurate particulars of income”. Our attention was also invited by the ld AR to the notice issued U/s 274 read with Section 271(1)(c) of the Act dated 28/02/2014 wherein the A.O. has recorded “Have concealed particulars of your income or furnished inaccurate particulars of such income”.

5. Further in the penalty notice u/s 274 read with section 271 of the Act dated 01.08.2014 the A.O. mentioned that: -

Penalty proceedings under above mentioned section of the IT Act were initiated during the course of assessment proceedings in your case for the above-mentioned assessment year and statutory notice has already been issued and served upon you. Now these proceedings are to be finalized and for that purpose you are again given an opportunity to explain your case and to show cause as to why penalty under above mentioned section of the Income Tax Act may not be levied upon you. Another printed notice dated 22-03-2016 was issued u/s 274 read with section 271 of the Act mentioning the same lines of earlier notice i.e.
Penalty proceedings under above mentioned section of the IT Act were initiated during the course of assessment proceedings in your case for the above-mentioned assessment year and statutory notice has already been issued and served upon you. Now these proceedings are to be finalized and for that purpose you are again given an opportunity to explain your case and to show cause as to why penalty under above mentioned section of the Income Tax Act may not be levied upon you.

6. It was contended by the ld AR that any notice issued under section 274, read with Section 271 (1) (c) of the Income Tax Act, 1961, should

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