2020 (8) TMI 17 - AT - Income Tax

Penalty u/s 271(1)(c) - non specification of charge - inaccurate particulars of income by claiming excess long-term capital loss which was otherwise not entitled - HELD THAT - We find that the order imposing penalty has not specified the guilt committed by the assessee for such penalty - First Appellate Authority, however has not taken into consideration the particular aspect of the matter. it appears from the penalty order that the Learned AO has not levied the penalty on the specific charge as mandated u/s 271 (1)(c) of the Act. In such facts and circumstances the Hon'ble Jurisdictional High Court in the case of Snita Transport Pvt. Ltd. 2012 (12) TMI 981 - HIGH COURT OF GUJARAT has held that penalty cannot be imposed without mentioning the specific charge. Thus as AO has not mentioned the specific charge in its penalty order whether it was levied for concealment of income or for furnishing inaccurate particulars of income by the assessee we find that the penalty levied by the AO and confirmed by the learned CIT (A) is not sustainable - Decided in favour of assessee.

Summary

Issues:
Penalty under section 271(1)(c) for inaccurate particulars of income and concealment.

Detailed Analysis:

Issue 1: Penalty under section 271(1)(c) - Specific Charge
- The appeal challenged the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for inaccurate particulars of income and concealment.
- The assessee argued that the penalty did not meet the criteria specified under section 271(1)(c) as the Assessing Officer (AO) did not clearly specify whether the penalty was for furnishing inaccurate particulars of income or for concealment of income.
- Citing relevant case laws, the assessee contended that the AO's failure to specify the exact charge was a non-application of mind and rendered the penalty ambiguous and unsustainable.
- The Tribunal noted that the penalty order did not clearly state the basis for imposing the penalty, failing to differentiate between inaccurate particulars and concealment of income as required by law.
- Referring to precedents, the Tribunal emphasized the necessity for a clear finding by the authority on whether there was concealment of income or inaccurate particulars furnished by the assessee before levying a penalty.
- As the AO had not specified the specific charge in the penalty order, the Tribunal concluded that the penalty imposed and confirmed by the CIT (A) was not legally sustainable and proceeded to delete the penalty.
- Due to the technical grounds for deleting the penalty, the Tribunal refrained from adjudicating on the merits of the grounds raised by the assessee.
- Consequently, the Tribunal allowed the assessee's appeal, pronouncing the order in open court on 30/07/2020.

Conclusion:
The Tribunal found the penalty imposed under section 271(1)(c) to be invalid due to the AO's failure to specify the exact charge of inaccurate particulars of income or concealment of income. The penalty was deleted, and the appeal of the assessee was allowed on technical grounds.