2019 (1) TMI 1004 - AT - Income Tax

Penalty u/s 271(1)(c) - non specification of charge - defective notice - Held that - As decied in AMAN MEHTANI VERSUS DCIT 2017 (11) TMI 1759 - ITAT DELHI Notice issued by the Assessing Officer under Section 274 read with Section 271(l)(c) to be bad in law as it did not specify which limb of Section 271(l)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FACTORY (2013 (7) TMI 620 - KARNATAKA HIGH COURT) - Decided in favour of assessee.

Summary

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

Analysis:
The appeal pertains to the sustenance of a penalty of ?1,85,710/- imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961. The assessee had filed the return of income declaring ?17,03,560/-, which was later scrutinized. The AO made additions on account of capital gain and interest, and initiated penalty proceedings for furnishing inaccurate particulars of income. The penalty was upheld by the ld. CIT(A), leading to the current appeal.

The main contention of the assessee was the absence of a specific charge mentioned in the notice issued under section 274 r.w.s. 271 of the Act. The assessee argued that without a specific charge, the penalty imposed was not justified. Reference was made to a decision of the ITAT Delhi Bench in a similar case. The ld. DR supported the order of the ld. CIT(A).

Upon considering the submissions, the Tribunal referred to a similar case adjudicated by the ITAT Delhi Bench, where it was held that the notice issued by the AO did not specify the provision under which the penalty was imposed. Citing relevant case law, the Tribunal concluded that since the issue was covered by previous judgments, the penalty imposed by the AO and upheld by the ld. CIT(A) was deleted, and the appeal of the assessee was allowed.

In summary, the Tribunal allowed the appeal of the assessee, deleting the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, due to the absence of a specific charge mentioned in the notice issued by the AO, in line with precedents and relevant case law.