N.K. Choudhry ORDER
N.K. Choudhry, Member (J)
1. This appeal has been preferred by the Assessee against the order dated 14.01.2019 impugned herein passed by the ld. Commissioner of Income Tax (Appeals)-28, New Delhi {in short "ld. Commissioner"} u/s. 250(6) of the Income Tax Act, 1961 (in short "the Act") for the assessment year 2014-15.
2. Brief facts, relevant for adjudication of this case are that the Assessee has claimed expenses of Rs. 48,53,671/- under the head "business promotion expenses" which were disallowed by the AO on the ground that the Assessee had organized two events at M/s. ITC Maurya Hotel, New Delhi on dated 23.01.2014 and 28.01.2014 and incurred expenses on lunch/dinner for 100 and 800 guests respectively and therefore the Assessee was required to furnish details by 16.11.2016, however, no reply has been received from it. The Assessee has also failed to prove business expediency to prove the business promotion expenses.
The AO also initiated the penalty for concealment/furnishing inaccurate particulars of income of Rs. 48,53,671/- and ultimately vide penalty order dated 29.06.2017 imposed a penalty of Rs. 16,49,763/- on the amount of Rs. 48,53,671/-. The said penalty order was confirmed by the Ld. Commissioner against which the Assessee in appeal before us.
3. The Ld. AR while referring the notices issued u/s. 274 of the Act submitted that the notices issued by the AO are vague having not specified particular limb of the penalty and therefore levy of penalty on the basis of vague notices is liable to be deleted. The Assessee in support of its contention also relied upon various judgments of the Hon'ble Apex Court and High Courts and Tribunal as well. The Ld. AR further claimed that even on merit also, the penalty cannot be levied just on denial of expenditure claimed by the Assessee.
4. On the contrary, the Ld. DR refuted the claim of the Assessee and supported the orders passed by the authorities below and submitted that impugned order under challenge does not suffer from any perversity, impropriety and/or illegality and hence needs no interference.
5. Having heard the parties at length and perused the material available on record. The Assessee has claimed 48,53,671/- under the head "business promotion expenses" which was disallowed by the AO. The said addition resulted into imposition of penalty by the AO and affirmation by the Ld. Commissioner. The Assessee has challenged the penalty order on various grounds including on the basis of notice issued u/s. 274 of the Act as well, which is legal in nature, therefore we deem it appropriate first to decide the legal issue involved in the instant case, before going into merits of the case.
5.1. In this case, the AO initiated the penalty and thereafter on dated 13-12-2016,03-04-2017 and 12-06-2017, issued the notices u/s. 274 read with 271(1)(c) of the Act for 'concealment of income/furnishing of particulars of Income, without specifying the particular limb of the penalty and finally imposed the penalty and therefore the question emerge as to whether ley of penalty can be justified on the basis of such notices referred above.
5.2. Hon'ble Apex Court in case of M/s. SSA's Emerald Meadows, (2016) 73 taxmann.com 248(SC) dismissed the Special Leave Petition filed by the Revenue against the judgment rendered by Hon'ble High Court of Karnataka whereby identical issue was decided in favour of the assessee. Operative part of the judgment in case of M/s. SSA's Emerald Meadows (supra) decided by Hon'ble High Court of Karnataka is reproduced below:-
"2. This appeal has been filed raising the following substantial questions of law:
(1) Whether, omission if assessing........