2023 (11) TMI 125 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of clear charge or struck-off the relevant limb - HELD THAT - AO s corresponding penalty show cause notice issued to the taxpayer had nowhere specified or struck-off the relevant limb as to whether he had concealed particulars of his income or furnished inaccurate particulars of such an income as the case may be. Faced with the situation we quote recent Full Bench landmark decision in Mohd. Farhan A.Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT has settled the law that the above stated failure on the Assessing Officer s part indeed vitiates the entire penal proceedings itself. We thus delete the impugned penalty for this precise reason alone. Decided in favour of assessee.

Summary

Issues:
The judgment involves the issue of penalty imposition u/s. 271(1)(c) of the Income Tax Act, 1961 for Assessment Year 1998-1999.

Details of the Judgment:

Issue 1: Penalty Imposition u/s. 271(1)(c)
The assessee's appeal contested the penalty of Rs. 1,24,557/- imposed by the lower authorities. It was noted that the Assessing Officer's show cause notice failed to specify whether the assessee had concealed income particulars or furnished inaccurate particulars. Citing a recent Full Bench decision, it was concluded that this failure invalidated the penalty proceedings. Consequently, the penalty was revoked solely on this ground.

Conclusion:
The Appellate Tribunal, ITAT Pune, allowed the assessee's appeal, ruling in favor of the assessee and deleting the penalty imposed u/s. 271(1)(c) for Assessment Year 1998-1999. The order was pronounced in open court on 01.11.2023.