9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (10) TMI 874 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - as argued no particular limb mentioned in the notice issued under Section 271(1)(c) r.w.s. 274 - notice is not mentioning the concealment or the furnishing of inaccurate particulars - HELD THAT - Since in the instant case also the 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. Although the Ld. DR submitted that mere non-striking off of the inappropriate words will not invalidate the penalty proceedings, however, the decision of the Hon'ble Karnataka High Court in the case of SSA'S Emerald Meadows 2015 (11) TMI 1620 - KARNATAKA HIGH COURT where the SLP filed by the Revenue has been dismissed 2016 (8) TMI 1145 - SC ORDER is directly on the issue contested herein by the Assessee. Further, when the notice is not mentioning the concealment or the furnishing of inaccurate particulars, the ratio laid down by the Hon'ble High Court in case of M/s. Sahara India Life Insurance Company Ltd. 2019 (8) TMI 409 - DELHI HIGH COURT will be applicable in the present case - Notice under Section 271(1)(c) r.w.s. 274 of the Act itself is bad in law - Decided in favour of assessee.
Issues:
Validity of penalty notice under Section 271(1)(c) of the Income Tax Act, 1961. Analysis: The appeal was filed against the order passed by CIT(A)-35, New Delhi for assessment year 2013-14. Despite notice, no one appeared for the assessee during the hearing. The Ld. DR submitted that the penalty is as per the law and relied on the order of the CIT(A). However, it was observed that the penalty notice issued under Section 271(1)(c) did not specify the particular limb of the provision for which the penalty proceedings had been initiated. The notice was considered defective as it did not mention whether it was for concealment of particulars of income or furnishing of inaccurate particulars of income. The decision of the Hon'ble Supreme Court in various cases, including CIT vs. Reliance Petro Products Pvt. Ltd. and CIT v. Manjunatha Cotton & Ginning Factory, was cited to support the argument that the notice was defective in nature. The Tribunal allowed the appeal filed by the assessee, holding that the notice issued by the Assessing Officer was bad in law as it did not specify the limb of Section 271(1)(c) under which the penalty proceedings had been initiated. The Tribunal relied on the decision of the Division Bench of the Court in the case of Commissioner of Income Tax vs. Manjunatha Cotton and Ginning Factory. The appeal was dismissed as the matter was covered by the judgment of the Division Bench, and no substantial question of law arose for determination. Therefore, Additional Ground No. (ii) of the assessee's appeal was allowed, and the penalty under Section 271(1)(c) was quashed due to the defective notice. The Tribunal further emphasized that the penalty notice in the present case also did not specify the limb of the provisions under which the penalty was initiated. The Ld. DR argued that the penalty proceedings were not invalidated by the non-striking off of inappropriate words in the notice. However, the Tribunal referred to the decision of the Hon'ble Karnataka High Court in the case of SSA's Emerald Meadows, where the Supreme Court dismissed the SLP filed by the Revenue. It was concluded that the penalty levied under Section 271(1)(c) was not sustainable and had to be deleted. The Tribunal set aside the order of the CIT(A) and directed the Assessing Officer to delete the penalty. The appeal of the assessee was allowed, and the penalty under Section 271(1)(c) was deemed invalid and quashed. In conclusion, the Tribunal found that the penalty notice under Section 271(1)(c) of the Income Tax Act was defective as it did not specify the particular limb of the provision for which the penalty proceedings had been initiated. Citing relevant legal precedents, the Tribunal quashed the penalty, emphasizing the importance of a clear and specific notice in penalty proceedings.
|
