2017 (6) TMI 1206 - AT - Income Tax

Penalty levied u/s 271(1)(c) - non specification of charge - Held that - The notice was issued in a simple proforma in which both the limbs to levy the penalty has been mentioned. No specific limb has been mentioned under which the penalty is going to be levied. We are of the view that the penalty levied by the Assessing Officer and confirmed by the learned Commissioner(Appeals) is not liable to be sustained in the eyes of law. - Decided in favour of assessee.

Summary

Issues:

1. Appeal against penalty levied under section 271(1)(c) of the Income Tax Act, 1961.

Analysis:

Issue 1: Appeal against penalty levied under section 271(1)(c) of the Income Tax Act, 1961

The appellant filed an appeal against the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for the assessment year 2008-09. The appellant disputed the penalty confirmed by the Commissioner (Appeals), claiming it to be arbitrary and unjustified. The case revolved around the purchase of land by the appellant from various sellers, where discrepancies in the declared and actual transaction amounts were noted. One seller confirmed receiving a higher amount than declared by the appellant, leading to additional undisclosed income admitted by the appellant during assessment. The penalty proceedings were initiated based on this undisclosed income.

During the proceedings, the appellant argued that the penalty notice did not specify the exact limb under which the penalty was imposed, citing legal precedents to support this contention. The appellant relied on decisions from the Hon'ble Jurisdictional High Court to challenge the validity of the penalty notice. The Departmental Representative, however, supported the penalty upheld by the Commissioner (Appeals).

Upon review, the Tribunal found that the penalty notice lacked specificity regarding the grounds for penalty imposition, aligning with the legal principles cited by the appellant. Consequently, the Tribunal concluded that the penalty imposed and confirmed earlier was not sustainable under the law. As a result, the Tribunal set aside the Commissioner (Appeals)'s decision and annulled the penalty levied under section 271(1)(c) of the Income Tax Act, 1961.

In conclusion, the appellant's appeal against the penalty was allowed by the Tribunal, emphasizing the importance of adhering to legal requirements in penalty imposition under the Income Tax Act, 1961.