9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (3) TMI 1199 - AT - Income TaxLevy of penalty u/s 271(1)(c) - assessment u/s 143(3) - undisclosed income - defective notice - conditions precedent for a passing of valid penalty orders u/s 271(1)(c) ignored - HELD THAT - 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) and M/S SSA S EMERALD MEADOWS 2015 (11) TMI 1620 - KARNATAKA HIGH COURT - Decided in favour of assessee.
Issues:
1. Validity of penalty under section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2009-10. 2. Compliance with notice requirements under section 274 r.w.s. 271 of the Act. 3. Allegations of concealment of income or providing inaccurate particulars. 4. Applicability of judicial precedents on notice validity. 5. Decision on the appeal against the levy of penalty. Issue 1: Validity of Penalty under Section 271(1)(c) for AY 2009-10 The appeal challenged the ex-parte order of CIT(A)-2 upholding the penalty under section 271(1)(c) for the Assessment Year 2009-10. The AO had determined the assessee's income with an addition of undisclosed income, leading to the penalty. The appellant contested the validity of the penalty based on the facts and circumstances of the case. Issue 2: Compliance with Notice Requirements The appellant argued that the penalty was invalid as the notice under section 274 r.w.s. 271 of the Act did not specify whether it was for concealment of income or furnishing inaccurate particulars. Citing the decision in CIT Vs. Manjunatha Cotton and Ginning Factory, the appellant claimed that the notice was defective and lacked clarity on the nature of default, rendering the penalty order invalid. Issue 3: Allegations of Concealment or Inaccurate Particulars The appellant contended that there was no concealment of income or inaccurate particulars provided, as the income offered for taxation during assessment was not taxable under the law. The appellant argued that the income was declared to avoid disputes, not due to any wrongdoing, thus challenging the basis for the penalty under section 271(1)(c). Issue 4: Applicability of Judicial Precedents The Tribunal examined the judgment of the Hon'ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory, emphasizing the importance of specifying the grounds for penalty in the notice under section 274 r.w.s. 271. The Tribunal followed the precedent and held that the defective notice invalidated the penalty proceedings, leading to the cancellation of the penalty under section 271(1)(c) for AY 2009-10. Issue 5: Decision on the Appeal Based on the findings related to the notice's invalidity, the Tribunal allowed the appeal, canceling the penalty under section 271(1)(c) for AY 2009-10. The Tribunal considered the other grounds raised by the appellant as academic in nature, given the primary issue's resolution. The decision was pronounced in favor of the appellant on March 22, 2019. This detailed analysis of the legal judgment highlights the key issues, arguments presented, judicial precedents applied, and the final decision rendered by the Tribunal regarding the validity of the penalty under section 271(1)(c) for the Assessment Year 2009-10.
|
