2017 (12) TMI 575 - AT - Income Tax

Levy of penalty u/s 271(1)(c) - defective notice - Held that - As perused the Notice dated 26.3.2013 issued by the AO for initiating the penalty and directing the assessee to appear before him at 11.30 AM on 26/04/2013 and issued a Show Cause to the assessee stating therein that ..you have concealed the particulars of your income or furnished inaccurate particulars of such income . After perusing the notice dated 26.3.2013 issued by the AO to the assessee, we are of the view that the AO has initiated the penalty for furnishing inaccurate particulars of income or concealment of income as well as in the penalty order dated 30.9.2013 AO has stated that he is satisfied that the assessee has concealed particulars of his income, which is contrary to law. - Decided in favour of assessee.

Summary

Issues Involved:
Appeal against penalty under section 271(1)(c) of the Income Tax Act for assessment years 2007-08, 2008-09, and 2009-10.

Analysis:

Issue 1: Penalty under section 271(1)(c) for assessment year 2007-08
The assessee appealed against the penalty order imposed by the Assessing Officer (AO) under section 271(1)(c) for concealing income. The Commissioner of Income Tax (Appeals) dismissed the appeal, upholding the penalty. The assessee contended that the penalty proceedings were flawed due to an ambiguous notice issued by the AO. The Tribunal found that the notice did not specify whether the penalty was for furnishing inaccurate particulars of income or concealing income, rendering it unsustainable in law. Citing relevant case laws, the Tribunal ruled in favor of the assessee, deleting the penalty.

Issue 2: Consistency in penalty deletion for other assessment years
In line with the decision on the penalty for the assessment year 2007-08, the Tribunal also deleted the penalties imposed for assessment years 2008-09 and 2009-10. The Tribunal maintained a consistent view across all three appeals, citing the same grounds and legal precedents. Consequently, the penalties for these assessment years were also deleted, and the appeals were allowed.

Conclusion:
The Tribunal, comprising Shri H. S. Sidhu and Shri Prashant Maharishi, ruled in favor of the assessee in all three appeals against the penalties imposed under section 271(1)(c) of the Income Tax Act. The Tribunal found the penalty proceedings flawed due to an ambiguous notice issued by the Assessing Officer, leading to the deletion of penalties for all three assessment years. The orders were pronounced on 05/12/2017, with all three appeals filed by the assessee being allowed.