Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2022 (5) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2022 (5) TMI 857 - ITAT DELHIPenalty u/s 271(1)(c) - Defective notice u/s 274 - as argued notice issued for concealment of income/ furnishing of particulars of Income, without specifying the particular limb of the penalty - HELD THAT:- The Hon'ble Karnataka High Court in the case of Manjunatha Cotton & Ginning Factory [2013 (7) TMI 620 - KARNATAKA HIGH COURT] observed that the levy of penalty has to be clear as to the limb under which it is being levied. As per Hon'ble High Court, where the Assessing Officer proposed to invoke first limb being concealment, then the notice has to be appropriately marked. The Hon'ble High Court held that the standard proforma of notice under section 274 of the Act without striking of the irrelevant clause would lead to an inference of non-application of mind by the Assessing Officer and levy of penalty would suffers from non-application of mind. The penalty provisions of section 271(1)(c) of the Act are attracted, where the Assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meanings. Therefore, it is imperative for the Assessing Officer to specify the relevant limb so as to make the Assessee aware, what is the charge made against him so that he can respond accordingly. In the present case having regard to the manner in which the Assessing Officer has issued notices dated 13-12-2016, 03-04-2017 and 12-06-2017 under section 274 r.w.s. 271(1)(c) of the Act without specifying the limb under which the penalty proceedings have been initiated and proceeded with, apparently goes to prove that notices in this case have been issued in a stereotyped manner without applying mind which is bad in law, hence can not be considered a valid notices sufficient to impose penalty u/s 271(1)(c) of the Act and therefore we are of the considered view that under these circumstances, the levy of penalty is not justifiable. On merits of this case AO did not find the claim of the Assessee as maintainable and made the addition and consequently imposed the penalty which stands affirmed by the ld. Commissioner. It is not the case of the Revenue that the Assessee has acted deliberately in defiance of law, or is guilty of contumacious or dishonest conduct, or acts in conscious disregard of its obligation and therefore mere making of a claim, which is not sustainable in law, would not, ipso facto, amount to furnishing of inaccurate particulars regarding the income of the Assessee and would, therefore, not automatically result in a penalty order against the Assessee’ as held by the Hon’ble Apex Court in the case of Reliance Petro Products Pvt. [2010 (3) TMI 80 - SUPREME COURT] while dealing with the penalty imposed for claiming expenditure which was declined to be allowed u/s 14A of the Act, hence on merit as well the penalty under challenge is not sustainable - Decided in favour of assessee.
|