2021 (3) TMI 42 - AT - Income Tax

Penalty u/s 271(1)(c) - proceedings under section 153C were conducted against the assessee - Defective notice - non specification of charge - as submitted that for A.Ys. 2010-11, 2011-12 2012-13 additional income that was disclosed before the Settlement Commission amounting to ₹ 1 lakh in each year was added by the AO and on such addition, penalty was imposed - HELD THAT - As decided in own case 2021 (1) TMI 840 - ITAT DELHI Inappropriate words in the penalty notice has not been struck off and the notice does not specify as to under which limb of the provisions, the penalty u/s 271(1)(c) has been initiated, therefore, we are of the considered opinion that the penalty levied u/s 271(1)(c) is not sustainable and has to be deleted - notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law. - Decided in favour of assessee.

Issues Involved:
1. Levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961.
2. Validity of the penalty notice under Section 271(1)(c) read with Section 274.
3. Consistency of the penalty with previous judgments in similar cases.

Detailed Analysis:

1. Levy of Penalty under Section 271(1)(c):
The primary issue in these appeals is the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer (AO) had levied a penalty of ?30,900 for each assessment year (2010-11, 2011-12, and 2012-13) based on additional income disclosed by the assessee before the Settlement Commission. The assessee argued that the AO initiated penalty proceedings without recording clear satisfaction or specifying the exact charge.

2. Validity of the Penalty Notice:
The Tribunal noted that the penalty notice issued under Section 271(1)(c) read with Section 274 did not specify whether the penalty was for "concealment of particulars of income" or "furnishing of inaccurate particulars of income." This ambiguity rendered the notice invalid. The Tribunal relied on the judgment of the Hon'ble Supreme Court in the case of SSA Emerald Meadows, which held that such a notice must be unambiguous to be valid. The Tribunal also referred to the assessee's own case for A.Y. 2008-09, where a similar penalty was deleted due to the same deficiency in the notice.

3. Consistency with Previous Judgments:
The Tribunal observed that the facts and issues in the assessment years under consideration (2010-11, 2011-12, and 2012-13) were identical to those in A.Y. 2008-09. In the earlier case, the Tribunal had deleted the penalty due to the invalidity of the penalty notice. The Tribunal found no distinguishing features in the current cases that would warrant a different decision. Consequently, the Tribunal followed its earlier decision and directed the deletion of the penalty for all three assessment years.

Conclusion:
The Tribunal allowed the appeals of the assessee for all three assessment years (2010-11, 2011-12, and 2012-13). It held that the penalty under Section 271(1)(c) was not justified due to the invalidity of the penalty notice, which failed to specify the exact charge. The Tribunal's decision was consistent with its earlier judgment in the assessee's own case for A.Y. 2008-09 and other relevant judicial pronouncements.

Order:
The appeals of the assessee were allowed, and the penalty levied by the AO was directed to be deleted. The order was pronounced in the open court on 17.02.2021.

← Previous Next →