2020 (2) TMI 1304 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - HELD THAT - The irrelevant portion have not been struck off by the A.O. in the notice. The exact charge/s against the assessee as to whether he concealed the particulars of his income or furnished inaccurate particulars of such income is not clear. It is not clear whether the notice was issued for levy of penalty for failure to comply with a notice u/s 142(1)/143(2) of the Income Tax Act 1961. While the notice appears to be for furnishing inaccurate particular of income the penalty was levied for concealment of income. As relying on DR. MURARI MOHAN KOLEY 2018 (9) TMI 1 - CALCUTTA HIGH COURT quash the impugned penalty imposed by the Assessing Officer under section 271(1)(c) of the Act and confirmed by the Ld. CIT(A). - Decided in favour of assessee.

Summary

Issues:
Challenge of penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 based on defective notice.

Analysis:
The appeal was filed against the penalty confirmed by the Learned Commissioner of Income Tax (Appeals) under section 271(1)(c) of the Act for the Assessment Year 2008-09. The case was disposed of ex-parte as no one appeared on behalf of the assessee. The notice issued for initiating penalty proceedings was found to be defective, as it did not specify whether the penalty was for concealing income particulars or furnishing inaccurate income particulars. The Tribunal referred to a similar case law and held that a penalty imposed based on a defective notice is not sustainable in law. The Tribunal noted that the Revenue missed the opportunity to subject the assessee to penalty proceedings due to the improper notice issued. The Revenue failed to make a specific case for the imposition of the penalty, leading to the dismissal of the appeal.

The Tribunal cited a decision by the Hon'ble Jurisdictional High Court and quashed the penalty imposed by the Assessing Officer under section 271(1)(c) of the Act. The Tribunal found no error of law in its order and dismissed the appeal, stating that no substantial question of law was involved. The stay petition was also dismissed, and no costs were awarded. The Tribunal emphasized that the proposition of law from the cited case law was directly applicable in the present case, leading to the allowance of the assessee's appeal. The impugned penalty was quashed based on the defective notice issued, following the decision of the Hon'ble Jurisdictional High Court.

In conclusion, the Tribunal allowed the appeal of the assessee, quashing the penalty imposed under section 271(1)(c) of the Act due to the defective notice issued by the Revenue. The Tribunal upheld the decision that the imposition of the penalty was not sustainable in law and dismissed the appeal without awarding any costs.

This detailed analysis highlights the key legal issues, the Tribunal's reasoning based on relevant case law, and the final decision to quash the penalty due to the defective notice issued by the Revenue.