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2020 (5) TMI 137 - AT - Income TaxPenalty u/sec. 271(1)(c) - defective notice - non specification of charge - concealment of income or furnishing of inaccurate particulars of income - whether the notice issued by the AO dated 28/12/2011 is valid or not? - HELD THAT - We find that the Hon'ble High Court of Telangana A.P. in the case of Smt. Baisetty Revathi 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT has considered the very same issue and held that non-striking of the irrelevant portion of 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, we hold that the notice issued under section 274 read with section 271, dated 28/12/2011 is invalid and, therefore penalty order passed by the AO, dated 27/10/2016 is hereby cancelled. - Decided in favour of assessee.
Issues involved:
Validity of penalty notice under section 271(1)(c) - Concealment of income or furnishing inaccurate particulars. Detailed Analysis: Issue 1: Validity of penalty notice under section 271(1)(c) - Concealment of income or furnishing inaccurate particulars The appeal was directed against the order of the Commissioner of Income Tax (Appeals) for the Assessment Year 2009-10. The assessee raised an additional ground before the Tribunal challenging the validity of the penalty notice issued by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. The notice was deemed vague by the assessee, raising a legal issue regarding the lack of specification in the notice as to whether the proceedings were for concealment of income or furnishing inaccurate particulars of income. The assessee argued that the notice was defective and should be considered void ab initio. The Tribunal considered the legal issue raised by the assessee and referred to the judgment of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. vs. CIT, emphasizing that when a question of law arises from facts on record, it should be allowed to be raised to correctly assess the tax liability. The Tribunal admitted the additional ground raised by the assessee for adjudication. Upon examining the validity of the penalty notice, the Tribunal noted that the notice did not clearly specify whether it was for concealment of income or furnishing inaccurate particulars. The assessee argued that the notice was not valid, citing relevant judgments, including the decision of the Hon'ble Supreme Court and the High Court of Telangana & A.P. The Departmental Representative contended that the notice was premature but valid. The Tribunal observed that the notice issued by the Assessing Officer was vague and liable to be quashed based on legal precedents. Referring to the decision of the Hon'ble High Court of Telangana & A.P. and the Tribunal's own previous rulings, the Tribunal held that the notice issued under section 271 was invalid. Consequently, the penalty order passed by the Assessing Officer was cancelled, and the appeal filed by the assessee was allowed. In conclusion, the Tribunal upheld the assessee's challenge regarding the validity of the penalty notice under section 271(1)(c) by deeming it as invalid due to the lack of clarity on whether it pertained to concealment of income or furnishing inaccurate particulars. The decision was based on legal principles and precedents, resulting in the cancellation of the penalty order.
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