2019 (1) TMI 40 - HC - Income Tax

Penalty u/s 271(1)(c) - non specification of charge - defective notice - Held that - No penalty is imposable under Section 271(1)(c) for the reason that at the time of initiating penalty proceedings or even at the time of issuing showcause notices for imposition of penalty, the Assessing Officer had not specified whether the penalty proceedings are on account of concealment of particulars or furnishing incorrect details / particulars. In the absence of the same being specified, the entire proceedings were held to be without jurisdiction. For the aforesaid conclusion, the impugned order of the Tribunal relied upon the order passed by its coordinate bench in the case of Shri. Samson Perinchery 2017 (1) TMI 1292 - BOMBAY HIGH COURT holding that the issue stands concluded in favour of the assessee.

Summary

Issues:
Challenge to common order of Income Tax Appellate Tribunal under Section 260A of the Income Tax Act, 1961 for Assessment Years 2007-08 and 2008-09.

Analysis:
The appeals before the High Court challenged the Tribunal's order regarding the deletion of penalties under Section 271(1)(c) of the IT Act, 1961. The Revenue questioned whether the Tribunal was justified in deleting the penalties. The Tribunal's decision was based on the lack of specification by the Assessing Officer regarding the nature of the penalty proceedings - whether for concealment of particulars or furnishing incorrect details. The Tribunal held that without such specification, the penalty proceedings were without jurisdiction. This conclusion was supported by a previous order in the case of Shri. Samson Perinchery, referencing the Karnataka High Court decision in CIT Vs. Manjunath Cotton and Ginning Factory, which, in turn, relied on the Apex Court decision in Ashok Pai Vs. CIT. The High Court noted that a previous appeal by the Revenue on a similar issue had been dismissed, as the issue was already settled in favor of the assessee by the Karnataka High Court decision. The High Court found no reason to deviate from this established legal position.

The High Court concluded that the proposed question did not raise any substantial question of law and thus declined to entertain it. Consequently, both appeals were dismissed, with no order as to costs.