M/s. Vashulinga Finance Pvt. Ltd., New Delhi V. ITO, New Delhi

ITA 2550/DEL/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1163 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 4 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-09-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 06-05-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NAINA SOIN KAPIL
• Assessee Lawyers: K P GARG
• Keywords: Opportunity of being heard; Principle of natural justice; Question of law; Initiation of penalty proceedings; Reasonable cause; Bad and doubtful debts; Set aside
• Section: 27; 6; 271(1)(c); 274; 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH D : NEW DELHI) BEFORE SHRI KULDIP SINGH, JUDICIAL MEMBER AND SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER ITA NO.2550/DEL./2016 (ASSESSMENT YEAR : 2011-12) M/S. VASHULINGA FINANCE PVT. LTD., VS. ITO, WARD 17 (2), 1004, CHIRANJIV TOWERS, NEW DELHI. 43, NEHRU PLACE, NEW DELHI 110 019. (PAN : AABCV4461G) (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI K.P. GARG, CA REVENUE BY : MS. NAINA SOIN KAPIL, SENIOR DR DATE OF HEARING : 27.08.2019 DATE OF ORDER : 13.09.2019 O R D E R PER KULDIP SINGH, JUDICIAL MEMBER : APPELLANT, M/S. VASHULINGA FINANCE PVT. LTD. (HEREINAFTER REFERRED TO AS THE ASSESSEE) BY FILING THE PRESEN T APPEAL SOUGHT TO SET ASIDE THE IMPUGNED ORDER DATED 08.02.2016 PASSED BY THE COMMISSIONER OF INCOME - TAX (APPEALS)-9, NEW DELHI QUA THE ASS ESSMENT YEAR 2011-12 ON THE GROUNDS INTER ALIA THAT :- 1. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN CONFIRMING THE PENALTY IMPOSED BY LD. AO U/S 271(1) (C) FOR A SUM RS.7,36,512/-. ITA NO.2550/DEL./2016 2 2. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DISMISSING THE LEGAL GROUNDS THAT NO VALID AND PROP ER NOTICE HAD BEEN ISSUED U/S 274 INITIATING THE PENALTY PROCEEDI NGS U/S 271(1)(C). 3. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN DISMISSING IN SUB-SILENTIO THE LEGAL GROUNDS OF THE ASSESSEE THAT THE PENALTY PROCEEDINGS IN THE ABSENCE OF RECORDING PROPER SATISFACTION IS CONTRARY TO LAW AND VOID AB-INITIO. 4. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT THE ITO IS NOT REQUIRED TO RECORD ANY SATISFAC TION WHICH IS DISCERNIBLE. 5. THE LD. CIT(A) HAS ERRED ON FACTS AND IN LAW IN HOLDING THAT PROPER OPPORTUNITY WAS GRANTED BY AO AS IS CLE AR FROM THE PENALTY ORDER. 6. THE ID. CIT(A) HAS ERRED ON FACTS AND IN LAW IN STATING THAT THE ASSESSEE HAD DELIBERATELY CLAIMED EXCESS B AD DEBTS AND FURNISHED INACCURATE PARTICULARS AND AS SUCH HOLDIN G THAT PENALTY IS EXIGIBLE ON THE FACTS AND CIRCUMSTANCES OF THE CASE. 2. BRIEFLY STATED THE FACTS NECESSARY FOR ADJUDICAT ION OF THE ISSUE AT HAND ARE : ON THE BASIS OF ASSESSMENT ORDER FRAMED UNDER SECTION 143 (3) OF THE INCOME-TAX ACT, 1961 (FOR SHORT THE ACT) A T AN INCOME OF RS.20,17,610/- BY WAY OF MAKING DISALLOWANCE OF RS. 19,70,000/- ON ACCOUNT OF CLAIMING EXCESSIVE BAD DEBTS WRITTEN OFF , THE PENALTY PROCEEDINGS WERE INITIATED UNDER SECTION 271(1)(C) OF THE ACT. DECLINING THE CONTENTIONS RAISED BY THE ASSESSEE, ASSESSING O FFICER (AO) LEVIED THE PENALTY TO THE TUNE OF RS.7,36,512/- @ 100% OF THE TAX SOUGHT TO BE EVADED. 3. ASSESSEE CARRIED THE MATTER BY WAY OF AN APPEAL BEFORE THE LD. CIT (A) WHO HAS CONFIRMED THE PENALTY BY DISMISSING THE APPEAL. FEELING AGGRIEVED, THE ASSESSEE HAS COME UP BEFORE THE TRIBUNAL BY WAY OF FILING THE PRESENT APPEAL. ITA NO.2550/DEL./2016 3 4. WE HAVE HEARD THE LD. AUTHORIZED REPRESENTATIVES OF THE PARTIES TO THE APPEAL, GONE THROUGH THE DOCUMENTS RELIED UP ON AND ORDERS PASSED BY THE REVENUE AUTHORITIES BELOW IN THE LIGHT OF TH E FACTS AND CIRCUMSTANCES OF THE CASE. 5. UNDISPUTEDLY, THE ASSESSEE HAS DEBITED AN AMOUNT OF RS.78,80,000/- TO PROFIT & LOSS ACCOUNT AGAINST THE BAD DEBTS WRITTEN OFF, HOWEVER WHILE COMPUTING THE TOTAL INCOME THE ASSESS EE HAS ADDED THIS INCOME TO TOTAL INCOME AND DEDUCTED AN AMOUNT OF RS .19,70,000/- AS BAD DEBTS. IT IS ALSO NOT IN DISPUTE THAT THE PENA LTY HAS BEEN LEVIED BY THE AO U/S 271(1)(C) OF THE ACT ON THE GROUND THAT WHILE COMPUTING TAXABLE INCOME, ASSESSEE HAD MADE EXCESSIVE CLAIM O F RS.19,70,000/- IN ORDER TO REDUCE TAX LIABILITY, THUS WILLFULLY CLAIM ED EXCESSIVE BAD DEBTS WRITTEN OFF. 6. IN THE BACKDROP OF THE AFORESAID FACTS AND CIRCU MSTANCES OF THE CASE, ORDER PASSED BY THE LOWER AUTHORITIES AND ARGUMENTS ADDRESSED BY THE AUTHORIZED REPRESENTATIVES OF BOTH THE PARTIES, THE SOLE QUESTION ARISES FOR DETERMINATION IN THIS CASE IS:- AS TO WHETHER THE ASSESSEE HAS CONCEALED PARTICULA RS OF INCOME OR HAS FURNISHED INACCURATE PARTICULARS OF INCOME DURING ASSESSMENT PROCEEDINGS? 7. LD. AR FOR THE ASSESSEE CONTENDED THAT IN ORDER TO INITIATE THE PENALTY PROCEEDINGS, THE AO HAS FAILED TO SPECIFY I N THE SHOW-CAUSE NOTICE ISSUED U/S 271(1)(C)/274 OF THE ACT IF THE A SSESSEE HAS CONCEALED ITA NO.2550/DEL./2016 4 THE PARTICULARS OF INCOME OR HAS FURNISHED INACCURA TE PARTICULARS OF INCOME AND RELIED UPON THE DECISIONS OF HONBLE KARNATAKA HIGH COURT IN CASE OF CIT VS. MANJUNATHA COTTON AND GINN ING FACTORY-359ITR 565, CIT VS. SSAS EMERALA MEADOWS - 73 TAXMANN.COM 241 (KAR.) (REVENUES SLP DISMISSED IN 242 TAXMAN 180) AND HONBLE HIGH COURT OF DELHI IN PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. IN ITA 475 /2019 ORDER DATED 02.08.2019. 8. IN ORDER TO PROCEED FURTHER, WE WOULD LIKE TO PE RUSE THE NOTICE ISSUED BY AO U/S 274 READ WITH SECTION 271(1 )(C) OF THE ACT TO INITIATE THE PENALTY PROCEEDINGS WHICH IS EXTRAC TED AS UNDER FOR READY PERUSAL:- NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961. INCOME TAX OFFICE, NEW DELHI. DATED: 21.03.2014 TO M/S VASHULINGA FINANCE P. LTD. 1004, CHIRANJIV TOWER, 43, NEHRU PLACE, NEW DELHI WHEREAS IN THE COURSE OF PROCEEDINGS BEFORE ME FOR THE ASSESSMENT YEAR 2011-12 IT APPEARS TO ME THAT YOU:- HAVE WITHOUT REASONABLE CAUSE FAILED TO COMPLY WITH A NOTICE UNDER SECTION 142(1)/143(2) OF THE INCOME TA X ACT, 1961 DATED ITA NO.2550/DEL./2016 5 HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME IN TERMS OF EXPLANATION 1, 2,3,4 AND 5. YOU ARE HEREBY REQUESTED TO APPEAR BEFORE ME AT 11. 30 AM/PM ON 9.4.2014 AND SHOW CAUSE WHY AN ORDER IMPOSING A PENALTY ON YOU SHOULD NOT BE MADE UNDER SECTION 271 OF THE INC OME TAX ACT, 1961. IF YOU DO NOT WISH TO AVAIL YOURSELF OF THIS OPPORTUNITY OF BEING HEARD IN PERSON OR THROUGH AUTHORIZED REPR ESENTATIVES YOU MAY SHOW CAUSE IN WRITING ON OR BEFORE THE SAID DATE WHICH WILL BE CONSIDERS BEFORE ANY SUCH ORDER IS MADE UND ER SECTION 271. SD/- ASSESSING OFFICER, INCOME-TAX OFFICER, WARD 17 (2), NEW DELHI. 9. BARE PERUSAL OF THE NOTICE ISSUED U/S 274 READ W ITH SECTION 271(1)(C) OF THE ACT, EXTRACTED ABOVE, IN ORDER TO INITIATE THE PENALTY PROCEEDINGS AGAINST THE ASSESSEE GOES TO PROVE THAT THE AO HIMSELF WAS NOT AWARE / SURE AS TO WHETHER HE IS ISSUING NOTICE TO INITIATE THE PENALTY PROCEEDINGS EITHER FOR CONCEALMENT OF PART ICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF SUCH INCOME BY THE ASSESSEE RATHER ISSUED VAGUE AND AMBIGUOUS N OTICE BY INCORPORATING BOTH THE LIMBS OF SECTION 271(1)(C). WHEN THE CHARGE IS TO BE FRAMED AGAINST ANY PERSON SO AS TO MOVE TH E PENAL PROVISIONS AGAINST HIM/HER, HE/SHE IS REQUIRED TO B E SPECIFICALLY MADE AWARE OF THE CHARGES TO BE LEVELED AGAINST HIM /HER. 10. HONBLE HIGH COURT OF KARNATAKA IN CASE OF CIT VS. MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) WHILE DECIDING THE IDENTICAL ISSUE HELD THAT WHEN THE AO HAS FAILE D TO ISSUE A SPECIFIC SHOW-CAUSE NOTICE TO THE ASSESSEE AS REQUI RED U/S 274 READ ITA NO.2550/DEL./2016 6 WITH SECTION 271(L)(C), PENALTY LEVIED IS NOT SUST AINABLE. THE OPERATIVE PART OF THE JUDGMENT IS REPRODUCED AS UND ER:- 59. AS THE PROVISION STANDS, THE PENALTY PROCEEDIN GS CAN BE INITIATED ON VARIOUS GROUND SET OUT THEREIN. IF THE ORDER PASSED BY THE AUTHORITY CATEGORICALLY RECORDS A FINDING REGAR DING THE EXISTENCE OF ANY SAID GROUNDS MENTIONED THEREIN AND THEN PENALTY PROCEEDINGS IS INITIATED, IN THE NOTICE TO BE ISSUED UNDER SECTION 274, THEY COULD CONVENIENTLY REFER TO THE S AID ORDER WHICH CONTAINS THE SATISFACTION OF THE AUTHORITY WHICH HA S PASSED THE ORDER. HOWEVER, IF THE EXISTENCE OF THE CONDITIONS COULD NOT BE DISCERNED FROM THE SAID ORDER AND IF IT IS A CASE O F RELYING ON DEEMING PROVISION CONTAINED IN EXPLANATION 1 OR IN EXPLANATION 1 (B), THEN THOUGH PENALTY PROCEEDINGS ARE IN THE N ATURE OF CIVIL LIABILITY, IN FACT, IT IS PENAL IN NATURE. IN EITHE R EVENT, THE PERSON WHO IS ACCUSED OF THE CONDITIONS MENTIONED IN SECTI ON 271 SHOULD BE MADE KNOWN ABOUT THE GROUNDS ON WHICH THE Y INTEND IMPOSING PENALTY ON HIM AS THE SECTION 274 MAKES IT CLEAR THAT ASSESSEE HAS A RIGHT TO CONTEST SUCH PROCEEDINGS AN D SHOULD HAVE FULL OPPORTUNITY TO MEET THE CASE OF THE DEPARTMENT AND SHOW THAT THE CONDITIONS STIPULATED IN SECTION 271 (1)( C) DO NOT EXIST AS SUCH HE IS NOT LIABLE TO PAY PENALTY. THE PRACTICE OF THE DEPARTMENT SENDING A PRINTED FORM WHERE ALL THE GRO UND MENTIONED IN SECTION 271 ARE MENTIONED WOULD NOT SA TISFY REQUIREMENT OF LAW WHEN THE CONSEQUENCES OF THE ASS ESSEE NOT REBUTTING THE INITIAL PRESUMPTION IS SERIOUS IN NAT URE AND HE HAD TO PAY PENALTY FROM 100% TO 300% OF THE TAX LIABILI TY. AS SAID PROVISIONS HAVE TO BE HELD TO BE STRICTLY CONSTRUED , NOTICE ISSUED UNDER SECTION 274 SHOULD SATISFY THE GROUNDS WHICH HE HAS TO MEET SPECIFICALLY. OTHERWISE, PRINCIPLES OF NATURAL JUSTICE IS OFFENDED IF THE SHOW CAUSE NOTICE IS VAGUE. ON THE BASIS OF SUCH PROCEEDINGS, NO PENALTY COULD BE IMPOSED ON THE ASS ESSEE. 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INAC CURATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASES MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE M AY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES T HE INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE O FFENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FINDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM G UILTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROU NDS MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR INITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONF INED ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECI FICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEET THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SUBSTANTIATE HIS ITA NO.2550/DEL./2016 7 CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOU LD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER . IT IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENA LTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PROCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PE NALTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROU ND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE BASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS N OT IDENTICAL WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IM POSITION OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY AT THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUB SEQUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENALTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 61. THE ASSESSING OFFICER IS EMPOWERED UNDER THE AC T TO INITIATE PENALTY PROCEEDINGS ONCE HE IS SATISFIED I N THE COURSE OF ANY PROCEEDINGS THAT THERE IS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF TOTAL INCOM E UNDER CLAUSE (C). CONCEALMENT, FURNISHING INACCURATE PARTICULARS OF INCOME ARE DIFFERENT. THUS THE ASSESSING OFFICER WHILE ISS UING NOTICE HAS TO COME TO THE CONCLUSION THAT WHETHER IS IT A CASE OF CONCEALMENT OF INCOME OR IS IT A CASE OF FURNISHING OF INACCURA TE PARTICULARS. THE APEX COURT IN THE CASE OF T ASHOK POI V. CIT [2 007] 292 ITR 11 /161 TAXMAN 340 AT PAGE 19 HAS HELD THAT CON CEALMENT OF INCOME AND FURNISHING INACCURATE PARTICULARS OF INCOME CARRY DIFFERENT CONNOTATIONS. THE GUJARAT HIGH COURT IN T HE CASE OF CIT V. MANU ENGG. [1980] 122 ITR 306 AND THE DELHI HIGH COURT IN THE CASE OF CIT V. VIRGO MARKETING (P) LTD . [2008] 171 TAXMAN 156, HAS HELD THAT LEVY OF PENALTY HAS TO BE CLEAR AS TO THE LIMB FOR WHICH IT IS LEVIED AND THE POSITION BE ING UNCLEAR PENALTY IS NOT SUSTAINABLE. THEREFORE, WHEN THE ASS ESSING OFFICER PROPOSES TO INVOKE THE FIRST LIMB BEING CONCEALMENT , THEN THE NOTICE HAS TO BE APPROPRIATELY MARKED. SIMILAR IS T HE CASE FOR FURNISHING INACCURATE PARTICULARS OF INCOME. THE ST ANDARD PROFORMA WITHOUT STRIKING OF THE RELEVANT CLAUSES W ILL LEAD TO AN INFERENCE AS TO NON-APPLICATION OF MIND. 11. HONBLE APEX COURT IN CASE OF CIT VS. SSAS EMERALA MEADOWS - (2016) 73 TAXMANN.COM 248 (SC) WHILE DISMISSING THE SLP FILED BY THE REVENUE QUASHING THE PENALTY BY TH E TRIBUNAL AS ITA NO.2550/DEL./2016 8 WELL AS HONBLE HIGH COURT ON GROUND OF UNSPECIFIED NOTICE HAS HELD AS UNDER:- SECTION 274, READ WITH SECTION 271(1)(C), OF THE I NCOME-TAX ACT, 1961 - PENALTY - PROCEDURE FOR IMPOSITION OF (CONDITIONS P RECEDENT) - ASSESSMENT YEAR 2009-10 - TRIBUNAL, RELYING ON DECI SION OF DIVISION BENCH OF KARNATAKA HIGH COURT RENDERED IN CASE OF C IT V. MANJUNATHA COTTON & GINNING FACTORY [2013] 359 1TR 565/218 TAXMAN 423/35 TAXMANN.COM 250, ALLOWED APPEAL OF AS SESSEE HOLDING THAT NOTICE ISSUED BY ASSESSING OFFICER UNDER SECTI ON 274 READ WITH SECTION 271 (1 )(C) WAS BAD IN LAW, AS IT DID NOT S PECIFY UNDER WHICH LIMB OF SECTION 271 (1 )(C) PENALTY PROCEEDINGS HAD BEEN INITIATED, I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME - HIGH COURT HELD THAT MATTER WAS COVERED BY AFORESAID DECISION OF DIVISION BENCH AND , THEREFORE, THERE WAS NO SUBSTANTIAL QUESTION OF LAW ARISING FOR DETE RMINATION - WHETHER SINCE THERE WAS NO MERIT IN SLP FILED BY REVENUE, S AME WAS LIABLE TO BE DISMISSED - HELD, YES [PARA 2] [IN FAVOUR OF ASSESS EE] 12. HONBLE DELHI HIGH COURT IN CASE OF PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA) WHILE DECIDING THE IDENTICAL ISSUE HELD AS UNDER :- 21. THE RESPONDENT HAD CHALLENGED THE UPHOLDING O F THE PENALTY IMPOSED UNDER SECTION 271 (1) (C) OF THE ACT, WHICH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF THE KARNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 359 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 271(1) (C) THE PE NALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. WHETHER FOR CONCEALME NT OF PARTICULARS OF INCOME OR FOR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIGH COURT HAD FOLLOWED THE ABOVE JUDGMEN T IN THE SUBSEQUENT ORDER IN COMMISSIONER OF INCOME TAX V. S SA'S EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR) , THE APPEAL AGAINST WHICH WAS DISMISSED BY THE SUPREME COURT OF INDIA IN SLP NO. 11485 OF2016 BY ORDER DATED 5TH AUGUST, 2016. 13. FOLLOWING THE DECISIONS RENDERED IN THE CASES O F CIT VS. MANJUNATHA COTTON AND GINNING FACTORY, CIT VS. SSA S EMERALA MEADOWS AND PR. CIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LTD. (SUPRA), WE ARE OF THE CONSIDERED VIEW THAT WHEN T HE NOTICE ISSUED BY THE AO IS BAD IN LAW BEING VAGUE A ND AMBIGUOUS ITA NO.2550/DEL./2016 9 HAVING NOT SPECIFIED UNDER WHICH LIMB OF SECTION 27 1(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS INITIATED U/S 271(1)(C) ARE NOT SUSTAINABLE. EVEN THE AO HAS FAILED TO APPLY HIS MIND AT THE TIM E OF RECORDING SATISFACTION AT THE TIME OF FRAMING ASSESSMENT TO I NITIATE THE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT AS TO UNDER WH ICH LIMB OF SECTION 271(1)(C) I.E. FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF SUCH INCOME, PENALTY PROC EEDINGS HAVE BEEN INITIATED RATHER WRITTEN VAGUE AND AMBIGUOUS SATISF ACTION RECORDED THAT, PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED. SO, INITIATING PENALTY PROCEEDINGS ON THE BASIS OF VAGUE AND AMBIGUOUS SAT ISFACTION RATHER NO SATISFACTION ARE BAD IN LAW AND AS SUCH NOT SUSTAI NABLE. 14. APART FROM THE DISCUSSION MADE IN THE PRECEDING PARAS, WE HAVE NOTICED THAT NO ADDITION WHATSOEVER HAS BEEN MADE I N THE ASSESSMENT ORDER RATHER WHILE INITIATING THE PENALTY PROCEEDIN GS, AO ASSUMED THE ADDITION AND HAS LEVIED THE PENALTY WHICH IS OTHERW ISE NOT SUSTAINABLE IN THE EYES OF LAW. CONSEQUENTLY, PENALTY LEVIED BY T HE AO AND CONFIRMED BY THE LD. CIT (A) IS DELETED AND THE APPEAL FILED BY THE ASSESSEE IS HEREBY ALLOWED. ORDER PRONOUNCED IN OPEN COURT ON THIS 13 TH DAY OF SEPTEMBER , 2019. SD/- SD/- (PRASHANT MAHARISHI) (KULDIP SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED THE 13 TH DAY OF SEPTEMBER, 2019/TS ITA NO.2550/DEL./2016 10 COPY FORWARDED TO: 1.APPELLANT 2.RESPONDENT 3.CIT 4.CIT(A)-9, NEW DELHI. 5.CIT(ITAT), NEW DELHI. AR, ITAT NEW DELHI.