2019 (7) TMI 1034 - AT - Income Tax

Penalty u/s 271(1)(c) - defective notice - non striking of irrelevant column in notice - HELD THAT - Since the facts are identical, respectfully following the decision of Hon ble High Court of Andhra Pradesh in Baisetty Revathi 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT and decision of this Tribunal cited (supra), we hold that the notice issued u/s 271(1)(c) without striking of irrelevant column is invalid and consequent penalty imposed by the AO is cancelled. Accordingly, we set aside the orders of the lower authorities and allow the appeal of the assessee.

Summary

Issues Involved:
Validity of penalty notice under section 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 2011-12.

Detailed Analysis:

1. Background:
The appeal was filed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2011-12, where the penalty was imposed under section 271(1)(c) of the Income Tax Act, 1961.

2. Initial Assessment and Penalty Imposition:
The assessment was completed with additions under section 68, leading to the initiation of penalty proceedings under section 271(1)(c) by the Assessing Officer (AO). The penalty was levied, and the appeal before the CIT(A) resulted in upholding the penalty.

3. Grounds of Appeal:
The appellant raised five grounds related to the levy of penalty under section 271(1)(c). The argument centered on the validity of the notice issued by the AO, specifically whether it was for concealment of income or furnishing inaccurate particulars.

4. Arguments and Legal Precedents:
The appellant's representative argued that the notice issued by the AO was invalid due to the lack of specificity regarding the nature of the offense. The Departmental Representative (DR) cited a judgment of the High Court of Andhra Pradesh to support the validity of the notice.

5. Tribunal's Decision:
The Tribunal analyzed the legal position and recent judgments, including one involving a similar case. It was noted that the notice issued under section 271(1)(c) must specify the grounds clearly, either concealment of income or furnishing inaccurate particulars. Failure to do so renders the notice invalid.

6. Legal Rulings and Consequences:
The Tribunal referred to decisions by the High Court and previous Tribunal cases where non-striking of irrelevant columns in the notice rendered it invalid. Following these precedents, the Tribunal held that the notice in this case was defective, leading to the cancellation of the penalty imposed by the AO.

7. Final Decision and Outcome:
Based on the legal principles and precedents cited, the Tribunal allowed the appeal of the assessee, setting aside the orders of the lower authorities. The penalty imposed under section 271(1)(c) was canceled, emphasizing the importance of clear and specific notices in penalty proceedings.

8. Conclusion:
The Tribunal's decision highlighted the significance of adherence to legal requirements in issuing penalty notices under the Income Tax Act, ensuring that taxpayers are informed of the grounds for penalty imposition. The case serves as a reminder of the procedural fairness and legal clarity necessary in penalty proceedings.

This detailed analysis outlines the key aspects of the judgment regarding the validity of the penalty notice under section 271(1)(c) of the Income Tax Act, 1961 for the Assessment Year 2011-12, emphasizing the importance of clear and specific notices in penalty proceedings to uphold procedural fairness and legal requirements.