2023 (6) TMI 1035 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - non specification as to whether penalty is being initiated for concealment of income or for furnishing inaccurate particulars of income ? - HELD THAT - A notice issued for imposing penalty u/s 271(1)(c) has to specify the charge and it cannot be omnibus notice. Hence, we agree with the assessee to conclude, penalty imposed u/s 271(1)(c) of the ACT will not be sustainable if the penalty notice does not specify the specific charge. In the present case, this ground has been raised for the first time before us. We remit the issue to AO. AO shall examine the records and follow the judicial principle as enunciated herein above which has also the mandate of Hon ble jurisdictional High Court. Needless to add, assessee should be provided an opportunity of being heard. Appeal of the assessee is allowed for statistical purposes.

Summary

Issues:
The judgment involves the issue of penalty imposition under section 271(1)(c) of the Income-tax Act, 1961, based on a notice that did not specify the charge of either "concealment of income" or "furnishing inaccurate particulars of income."

Case Details:
The appeal was filed against the order confirming the penalty imposed by the Assessing Officer under section 271(1)(c) for the assessment year 2011-12.

Additional Ground Raised by Assessee:
The appellant contended that the penalty notice lacked specificity regarding the charge for which the penalty was initiated, citing various case laws to support the argument.

Admission of Additional Ground:
Considering the gravity of the legal grounds raised, the Tribunal admitted the additional ground based on the case laws cited by the assessee's counsel.

Assessee's Submission:
The assessee's counsel argued that the penalty notice did not clearly specify the charge, rendering the penalty void ab initio, as supported by judicial decisions provided in the submission.

Revenue's Counter-Submission:
The Revenue's representative presented arguments citing various High Court decisions, but the Tribunal noted the reliance on non-jurisdictional High Courts compared to the assessee's references to the Apex Court and jurisdictional High Court decisions.

Jurisdictional High Court Decision:
The Tribunal referred to a jurisdictional High Court decision emphasizing the necessity for a penalty notice to specify the charge under section 271(1)(c), dismissing the appeal and upholding the penalty imposition.

Conclusion and Remittance:
The Tribunal concurred with the assessee's argument based on the jurisdictional High Court decision, concluding that the penalty imposed would not be sustainable if the notice did not specify the specific charge. The issue was remitted to the Assessing Officer for further examination in line with the judicial principles.

Outcome:
The appeal of the assessee was allowed for statistical purposes, emphasizing the importance of providing the assessee with a fair opportunity to be heard.

Date of Order:
The order was pronounced in the open court on June 22, 2023.