IN INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM ITA No.24/PUN/2019 Assessment Year : 2011-12 Sohail Isaq Bagwan, Bagwan Galli, Kacheri Road, Baramati Appellant PAN: ADQPB9359L Vs. Dy. Commissioner of Income Tax, Circle 5, Pune Respondent Appellant by : Shri M.K. Kulkarni Respondent by : Shri Pankaj Garg // Date of Hearing : 23.07.2019 Date of Pronouncement: 19.08.2019 ORDER PER SUSHMA CHOWLA, JM: appeal filed by assessee is against order of CIT(A)-7, Pune, dated 26.11.2018 relating to assessment year 2011-12 against penalty levied under section 271(1)(c) of Income-tax Act, 1961 (in short Act ). 2. assessee has raised following grounds of appeal:- 1) On facts and in circumstances of case and in law Ld. CIT(A) was not justified in confirming penalty under section 271(1)(c) of Rs. 4,84,791/- levied by A.O. was not so leviable without pointing out any "concealment" or "furnishing inaccurate particulars" of Income. penalty levied under section 271(1)(c) is not sustainable. It be quashed. ITA No.24/PUN/2019 2 Shri Sohail Isaq Bagwan 2) On facts and in circumstances of case and in law there was no satisfaction recorded by AO under which limb of section, whether "concealment" or "Furnishing of inaccurate particulars" of income is available. In absence of such satisfaction penalty levied by AO and confirmed by LD. CIT(A) is not sustainable. It be quashed. 3) On facts and in circumstances of case and in law and considering Hon'ble Bombay High Court and other judicial precedents penalty levied under section 271(1)(c) by AO and confirmed by Ld. CIT(A) though this legal position was pointed out before Ld. CIT(A), Ld. CIT(A) ignored all this legal position and confirmed penalty. It be deleted. 3. only issue raised in present appeal is against levy of penalty under section 271(1)(c) of Act. 4. Briefly, in facts of case, assessee had filed return of income declaring total income of 45,14,260/-. case of assessee was picked up for scrutiny under CASS and addition of 26,07,760/- on account of short term capital gains was made in hands of assessee. Assessing Officer while finalizing assessment has held that assessee has concealed particulars of income. While levying penalty for concealment, Assessing Officer had held assessee to have concealed its income by furnishing inaccurate particulars of income. Thereafter, Assessing Officer had levied penalty under section 271(1)(c) of Act at 4,64,791/-, which was confirmed by CIT(A) and assessee is in appeal against same. 5. We have heard rival contentions and perused record. issue which arises in present appeal is against levy of penalty for concealment under section 271(1)(c) of Act. Assessing Officer while completing assessment had made addition of 26,07,760/- on account of short term capital gains was made in hands of assessee. Thereafter, while levying penalty, Assessing Officer held as under:- 08. Keeping in view of facts and circumstances of case, I am satisfied that assessee without sufficient and reasonable cause under deliberate intention concealed its income by furnishing inaccurate particulars of income to extent of Rs.26,07,760/-. Therefore, I consider this to be fit ITA No.24/PUN/2019 3 Shri Sohail Isaq Bagwan case for imposing penalty U/s 271(1)(c) of I.T. Act, 1961. Accordingly penalty of Rs.4,64,791/- hereby imposed U/s 271(1)(c) of I.T. Act, 1961 . 6. Assessing Officer thus, while recording satisfaction for initiating penalty proceedings had held assessee to have concealed particulars of income and while levying penalty had held assessee to have concealed its income by furnishing inaccurate particulars of income. In other words, Assessing Officer has failed to come to finding as to which limb of section 271(1)(c) of Act has not been fulfilled by assessee. Hence, penalty order passed by Assessing Officer suffers from infirmity i.e. in not coming to finding as to which limb of section 271(1)(c) of Act is not satisfied. 7. We find support from ratio laid down by Hon ble Bombay High Court in CIT Vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom), wherein it was held that where there is no proper satisfaction for initiating penalty proceedings and in absence of proper show cause notice to assessee, there is no merit in levy of penalty. In present case, Assessing Officer has failed to conclude which limb of section 271(1)(c) of Act is applicable, hence order suffers from infirmity. Accordingly, we delete penalty levied under section 271(1)(c) of Act. grounds of appeal raised by assessee are thus, allowed. 8. In result, appeal of assessee is allowed. Order pronounced on this 19th day of August, 2019. Sd/- Sd/- (ANIL CHATURVEDI) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune; Dated : 19th August, 2019. GCVSR ITA No.24/PUN/2019 4 Shri Sohail Isaq Bagwan Copy of Order is forwarded to : 1. Appellant; 2. Respondent; 3. CIT(A)-7, Pune; 4. Pr.CIT-6, Pune; 5. DR B , ITAT, Pune; 6. Guard file. BY ORDER, //True Copy// Sr. Private Secretary ITAT, Pune Sohail Isaq Bagwan v. Dy. Commissioner of Income-tax, Circle 5, Pune