2019 (10) TMI 282 - AT - Income Tax

Penalty u/s 271(1)(c) - non-striking of the irrelevant portion of the notice issued u/sec. 274 - HELD THAT - Hon'ble High Court of Telangana A.P. in the case of Smt. Baisetty Revathi 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT being a latest judgment has considered the very same issue and held that non-striking of the irrelevant portion of the notice issued u/sec. 274 is invalid. The very same judgment has been followed by the coordinate bench of this tribunal in the case of Konchada Sreeram 2017 (11) TMI 1164 - ITAT VISAKHAPATNAM . Therefore, respectfully following above referred to judicial precedents, we hold that the notice issued under section 274 read with section 271(1)(c), dated 25/03/2013 is invalid - Decided in favour of assessee.

Summary

Issues:
Validity of penalty notice u/sec. 271(1)(c) - Whether notice specified concealment or inaccurate particulars clearly.

Analysis:

Issue 1: Validity of Penalty Notice
The case involved appeals against separate orders of the Commissioner of Income Tax for Assessment Years 2003-04, 2005-06, and 2006-07. The primary issue was the validity of the penalty notice issued under section 271(1)(c) by the Assessing Officer. The additional ground raised by the assessee questioned the clarity of the notice, specifically whether it specified the reason for penalty - concealment of income or furnishing inaccurate particulars. The assessee argued that the notice was vague, impacting the legality of the penalty proceedings.

Analysis:
The Tribunal admitted the additional ground raised by the assessee, citing the Supreme Court's ruling in National Thermal Power Co. Ltd. vs. CIT. The Tribunal emphasized that no fresh investigation of facts was required, and the legal issue raised by the assessee needed adjudication. The validity of the notice was crucial, as clarified by judicial precedents, including the Supreme Court and High Court decisions. The notice issued by the Assessing Officer was deemed vague, as it did not clearly specify whether it pertained to concealment of income or inaccurate particulars, rendering it invalid.

Conclusion:
Based on the judicial precedents and the specific facts of the case, the Tribunal held that the notice issued under section 274 read with section 271(1)(c) was invalid. Consequently, the penalty order passed by the Assessing Officer was canceled. The decision was in line with the latest judgment of the High Court of Telangana & A.P. and was supported by the precedents set by the Tribunal in similar cases. The Tribunal allowed all appeals filed by the assessee, emphasizing the importance of clear and specific notices in penalty proceedings to ensure fairness and adherence to legal principles.