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2019 (5) TMI 1157 - AT - Income TaxLevy of penalty u/s. 271(1)(c) - Defective notice - non specification of charge - assessee has submitted that the notice issued by the Assessing Officer is not clear whether notice issued under section 274 r.w.s. 271(1)(c) is for concealment of income or furnished inaccurate particulars - HELD THAT - Non-striking of the irrelevant column renders the notice issued u/s 271 as invalid. When the charge is either concealment of particulars of income or furnishing of inaccurate particulars thereof, the revenue must specify as to which one of the two is sought to be pressed into service and cannot be permitted to club both by interjecting an 'or' between the two, as in the present case. This ambiguity in the show-cause notice is further compounded presently by the confused finding of the Assessing Officer that he was satisfied that the assessee was guilty of both. See SSA'S EMERALD MEADOWS 2016 (8) TMI 1145 - SC ORDER , SMT. BAISETTY REVATHI 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT and KONCHADA SREERAM VERSUS INCOME TAX OFFICER, WARD-1 (1) , VISAKHAPATNAM 2017 (11) TMI 1164 - ITAT VISAKHAPATNAM - Decided in favour of assessee.
Issues:
Validity of penalty notice under section 271(1)(c) - Whether notice is valid or not. Analysis: Issue 1: Validity of penalty notice under section 271(1)(c) The case involved an appeal against the penalty order passed under section 271(1)(c) of the Income Tax Act, 1961. The Assessing Officer had initiated penalty proceedings based on deposits into the bank account treated as income of the assessee. The Assessing Officer issued a notice under section 274 r.w.s. 271(1)(c) without specifying whether it was for concealment of income or furnishing inaccurate particulars. The assessee contended that the notice was vague and not valid. The Hon'ble Supreme Court's decision in the case of National Thermal Power Co. Ltd. Vs. CIT was cited, emphasizing that a legal issue raised by the assessee, which goes to the root of the matter, should be admitted when all facts are available on record. The Tribunal admitted the additional ground raised by the assessee for adjudication. The issue was whether the notice was valid, and it was found to be vague and not in compliance with the law, as per various judicial precedents cited, resulting in the cancellation of the penalty imposed by the Assessing Officer. The Tribunal considered the notice issued by the Assessing Officer and the relevant case laws, including the decision of the Hon'ble Supreme Court in the case of SSA's Emerald Meadows and the Hon'ble Jurisdictional High Court's decision in the case of Smt. Baisetty Revathi. It was observed that the notice did not specify the grounds for penalty clearly, as required by law. The Tribunal held that the notice was invalid due to its ambiguity, following the precedent set by the Hon'ble Supreme Court and the decisions of the Hon'ble Jurisdictional High Court and the Coordinate Bench of the Tribunal. Consequently, the penalty imposed by the Assessing Officer was canceled, and the appeal filed by the assessee was allowed. In conclusion, the Tribunal's decision focused on the validity of the penalty notice issued by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961. The notice was deemed invalid due to its lack of clarity regarding the grounds for penalty, as required by law. The decision was based on various judicial precedents, including the Hon'ble Supreme Court's ruling and decisions of the Hon'ble Jurisdictional High Court and the Coordinate Bench of the Tribunal, leading to the cancellation of the penalty imposed by the Assessing Officer and the allowance of the assessee's appeal.
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