CA Suraj R. Agrawal
Brief of the Case:-
The notice is issued proposing to levy penalty under Section 271(1) (b) of the Act whereas the order is passed by the Assessing Officer under Section 271(1) (c) of the Act which clearly indicates that there was no application of mind by the Assessing Officer while issuing the notice under Section 274 of the Act.
Case Summary:-
Facts of the case:
- The appellant filed the return of income for the assessment year 2001-02 disclosing income only under the head ‘income from business’ amounting to Rs.1,64,74,416/-.
- The appellant had claimed Rs.28,40,409/- as loss on ‘sale of investment’ under the financial charges as revenue expenditure.
- The Assessing Officer held the above income to be in the nature of capital expenditure and disallowed the claim made by the assessee. Accordingly, assessments were concluded.
- The Assessing Officer also separately initiated penalty proceedings under Section 271(1)(c) of the Act. A show cause notice under Section 274 of the Act dated 11.09.2006 was served on the appellant seeking to show cause why penalty should not be imposed.
- The appellant filed suitable reply to the same.
- After considering the objections, the Assessing Officer passed an order under Section 271(1)(c) of the Act, levying penalty as proposed.
- Aggrieved by the same, the assessee filed an appeal before the Appellate Commissioner who allowed the appeal after hearing the parties.
- Being aggrieved, the revenue preferred an appeal before the ITAT which was allowed setting aside the order passed by the Appellate Commissioner and restoring the order of the Assessing Officer.
- Aggrieved by the same, the appellant is before this Court raising the substantial questions of law as stated above.
Contentions of Appellant:
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