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2020 (8) TMI 271 - AT - Income TaxPenalty u/s 271(1)(c) - Non specification of charge - whether the assessee is accused of concealment of particulars of any taxable income or he had furnished inaccurate particulars of such income? - HELD THAT - It emerges from the penalty notice dated 15.12.2016 that the AO did not specify as to whether the assessee is accused of concealment of particulars of any taxable income or he had furnished inaccurate particulars of such income. This tribunal s co-ordinate bench s decision in Nishith Kumar Jain Vs. ACIT 2016 (3) TMI 642 - ITAT KOLKATA has deleted an identical penalty. We hold that levy of penalty in the present case cannot be sustained. We therefore cancel the orders imposing penalty on the Assessee and allow the appeal by the Assessee. On the issue of defect in show cause notice u/s 274 of the Act, we are not dealing with the other arguments made on merits of the orders imposing penalty on the assessee. Also See DR. MURARI MOHAN KOLEY 2018 (9) TMI 1 - CALCUTTA HIGH COURT - Decided in favour of assessee.
Issues:
Appeal against penalty imposed under section 271(1)(c) of the Income Tax Act, 1961 for assessment year 2014-15. Analysis: Issue 1: Penalty Imposed under Section 271(1)(c) The appeal challenged the penalty of ?3,21,026 imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. The tribunal noted that the penalty notice did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Citing a previous decision, it was highlighted that the notice must clearly state the grounds for imposing the penalty. The tribunal emphasized that penalty proceedings must be initiated and imposed based on specific grounds mentioned in the notice. Failure to do so renders the penalty invalid. The tribunal referred to the principles outlined by the Karnataka High Court regarding the imposition of penalties under section 271(1)(c) and concluded that the penalty in the present case was not sustainable due to the defective notice. The tribunal, therefore, canceled the penalty imposed on the assessee. Issue 2: Defect in Show Cause Notice The tribunal found that the show cause notice under section 274 of the Act was defective as it did not specify the grounds on which the penalty was sought to be imposed. Relying on the decision of the Karnataka High Court, the tribunal held that all orders imposing penalties in the assessment years were invalid due to the defective notice. Consequently, the tribunal canceled the penalties imposed on the assessee based on this defect. Issue 3: Jurisdictional High Court's Decision The tribunal referred to a decision of the jurisdictional high court which had also declined a similar plea by the Revenue. In line with this decision, the tribunal directed the Assessing Officer to delete the penalty in question in the present case. The tribunal allowed the assessee's appeal against the penalty imposed under section 271(1)(c) for the assessment year 2014-15. In conclusion, the tribunal held that the imposition of the penalty was not sustainable due to the defective show cause notice, and therefore, canceled the penalties imposed on the assessee. The tribunal's decision was in line with legal principles emphasizing the importance of clearly specifying the grounds for imposing penalties under section 271(1)(c) of the Income Tax Act, 1961.
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