9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2019 (4) TMI 360 - AT - Income TaxLevy of penalty u/s 271(1)(c) - defective notice - non specified the exact charge, viz., whether the charge is that the Assessee has furnished inaccurate particulars of income or concealed particulars of income by striking out the irrelevant portion of printed show cause notice - HELD THAT - The standard proforma of notice under section 274 without striking of the irrelevant clauses would lead to an inference of non-application of mind by the Assessing Officer. The Hon'ble Supreme Court in the case of Dilip N. Shroff vs. JCIT 2007 (5) TMI 198 - SUPREME COURT has also noticed that where the Assessing Officer issues notice under section 274 in the standard proforma and the inappropriate words are not deleted, the same would postulate that the Assessing Officer was not sure as to whether he was to proceed on the basis that the assessee had concealed the particulars of his income or furnished inaccurate particulars of income. Thus levy of penalty suffers from non-application of mind. Thus the manner in which the AO has issued notice under section 274 r.w.s. 271(1)(c) of the Act dated 19.03.2013 without striking off the irrelevant words, the penalty proceedings show anon-application of mind by the Assessing Officer and is, thus, unsustainable. - Decided in favour of assessee.
Issues Involved:
Levy of penalty under section 271(1)(c) of the Income Tax Act, 1961 for furnishing inaccurate particulars of income. Detailed Analysis: Issue 1: Levy of Penalty under Section 271(1)(c) of the Income Tax Act The appeal was filed against the order confirming the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer disallowed interest and business expenses, issuing a notice for concealing or furnishing inaccurate particulars of income. The CIT(A) and the Departmental Representative upheld the penalty. However, the Authorized Representative cited the VeerbhadrappaSangappa & Co. case from the Karnataka High Court, arguing that the penalty notice lacked specificity. The Hon'ble Supreme Court also dismissed the revenue's SLP against the Karnataka HC judgment. The Tribunal found that the notice did not specify the exact charge, as required by law, and referenced the M/s. SSA's Emerald Meadows case where the penalty notice was deemed invalid. The Tribunal ruled in favor of the assessee, following the legal precedents cited. The notice was considered insufficient as it did not clearly state whether inaccurate particulars or concealment of income was the charge, leading to the cancellation of the penalty. Issue 2: Application of Legal Precedents The Tribunal referenced various legal precedents, including the VeerbhadrappaSangappa & Co. case, the M/s. SSA's Emerald Meadows case, and the Dilip N. Shroff vs. JCIT case to establish the requirement for specificity in penalty notices under section 271(1)(c) of the Act. It was emphasized that the two limbs of the section, concealment and inaccurate particulars, carry distinct meanings and must be clearly indicated in the notice. Failure to strike off irrelevant portions of the notice was deemed as non-application of mind by the Assessing Officer, rendering the penalty unsustainable. The Tribunal's decision was based on the legal principles laid down by the Karnataka High Court and the Supreme Court, ensuring that penalty proceedings are conducted with clarity and adherence to procedural requirements. Conclusion: The Tribunal, following legal precedents and established principles, ruled in favor of the assessee, canceling the penalty imposed under section 271(1)(c) of the Income Tax Act. The decision highlighted the importance of specificity in penalty notices, ensuring that taxpayers are adequately informed of the charges against them. By applying legal reasoning and upholding procedural fairness, the Tribunal provided a comprehensive analysis leading to the allowance of the assessee's appeal. This detailed analysis of the judgment provides a thorough understanding of the issues involved and the Tribunal's decision, supported by legal precedents and principles.
|
