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2019 (3) TMI 1399 - AT - Income TaxPenalty levied u/s.271(1)(c) - non specification of charge - both the limbs of charge are mentioned there i.e. concealment of income and furnishing of inaccurate particulars of income - HELD THAT - Hon ble Bombay High Court in the case of CIT Vs. Samson Perinchery 2017 (1) TMI 1292 - BOMBAY HIGH COURT wherein has considered in the case of CIT Vs. Manjunath Cotton and Ginning Factory 2013 (7) TMI 620 - KARNATAKA HIGH COURT , the legal proposition that comes out and which is binding in nature is that the Assessing Officer should be clear as to which of the two limbs under which penalty is imposable, has been contravened or indicate that both have been contravened while initiating penalty proceedings. It cannot be that the initiation would be only on one limb i.e. for furnishing inaccurate particulars of income while imposition of penalty on the other limb i.e. concealment of income. The sanctity in terms of natural justice with regard to this proposition is that the assessee under the scheme of welfare legislation which is embedded in the Income Tax Act, 1961 should get an opportunity to prepare himself for the defense as regards to the exact charge on which penalty is imposed upon him u/s. 271(1)(c). In the instant case, the charge is vague and therefore, levy of penalty is not warranted. Furthermore, the revised return filed by the assessee is in conformity with section 139(5) of the Act wherein all the particulars of income have been disclosed - direct the Assessing Officer to delete the penalty from the hands of the assessee - decided in favour of assessee.
Issues:
Confirmation of penalty u/s.271(1)(c) of the Income Tax Act, 1961. Analysis: The appeal pertains to the confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961. The assessee, a salaried individual, had income from various sources. The penalty was initiated due to the failure of the assessee to disclose specific amounts of salary received, interest income, and source of cash deposits. The assessee contended that the notice and penalty order were vague regarding the specific charge under which the penalty was imposed. Citing legal precedents, the assessee argued that if the charge is not specific, penalty under section 271(1)(c) cannot be levied. The assessee also highlighted that a revised return was filed before the completion of assessment, disclosing the previously omitted income components, thus asserting compliance with the law. The Tribunal examined the case records and legal precedents cited. It noted that the charge for the penalty was not specific in the notice and penalty order, mentioning both limbs of 'concealment of income' and 'furnishing inaccurate particulars of income.' Referring to judicial decisions, the Tribunal emphasized the importance of clarity in specifying the charge for imposing penalties. It held that the assessee should be aware of the exact charge to prepare a defense effectively. In this case, due to the vague charge, the levy of penalty was deemed unwarranted. Additionally, the Tribunal acknowledged the revised return filed by the assessee, which aligned with the statutory requirements of disclosing income particulars under section 139(5) of the Act. Considering the facts and legal principles, the Tribunal set aside the order of the Ld. CIT(Appeals) and directed the Assessing Officer to delete the penalty imposed on the assessee. Consequently, the appeal of the assessee was allowed, and the penalty was revoked. The judgment was pronounced on 26th March 2019.
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