2021 (4) TMI 105 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - Defective of notice - non specification of charge - HELD THAT - As relying on BIJOY KUMAR AGARWAL 2019 (6) TMI 721 - CALCUTTA HIGH COURT and DR. MURARI MOHAN KOLEY 2018 (9) TMI 1 - CALCUTTA HIGH COURT we quash the order passed u/s 271(1)(c) on the ground that notice issued for levy of penalty has not specified the charge.- Decided in favour of assessee.

Summary

Issues:
1. Appeal against order of CIT(A) under section 250 of the Income Tax Act, 1961 for Assessment Year 2004-05.
2. Validity of notice issued for levy of penalty under section 271(1)(c) of the Act.

Analysis:
1. The appeal before the Appellate Tribunal was against the order of the CIT(A) for the Assessment Year 2004-05. The Tribunal noted that the Assessing Officer (AO) had not specified the charge in the notice issued for the levy of penalty under section 271(1)(c) of the Act. Citing the decision of the Hon'ble Calcutta High Court in a similar case, it was observed that the notice was defective as it did not specify the contravention the assessee was guilty of. The Tribunal referred to various judgments supporting this view, emphasizing the technical defect in the notice issued under section 271(1)(c) read with section 274 of the Income Tax Act, 1961. The Tribunal clarified that it only considered the technical defect in the notice and did not delve into any other issue.

2. Another judgment by the Hon'ble High Court in a similar case reiterated the importance of a specific charge against the assessee in the notice for penalty proceedings. It was highlighted that the Revenue failed to make a specific case for the imposition of penalty, leading to the dismissal of the appeal. The Tribunal, applying the legal principles established by the High Court, concluded that the order passed under section 271(1)(c) was to be quashed due to the lack of specification of the charge in the penalty notice. Consequently, the appeal filed by the assessee was allowed, and the penalty order was set aside.

In summary, the Appellate Tribunal, in this case, allowed the appeal filed by the assessee against the order of the CIT(A) for the Assessment Year 2004-05. The Tribunal quashed the penalty order under section 271(1)(c) due to the defective notice issued by the AO, which failed to specify the charge against the assessee. The decision was based on established legal principles outlined in judgments by the Hon'ble High Court, emphasizing the necessity of a specific charge in penalty notices for proper imposition of penalties.