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2024 (6) TMI 883 - ITAT MUMBAIPenalty U/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - HELD THAT - AO did not mention the nature of concealment in the notice issued u/s 274/271(1)(c). The counsel laid down that in the absence of such specific notice, the notice would be invalid. As held in various judicial pronouncements including the decision of SAS s Emerald Meadows 2015 (11) TMI 1620 - KARNATAKA HIGH COURT against which Special Leave Petition (SLP) filed by the department stood dismissed by Hon ble Supreme Court 2016 (8) TMI 1145 - SC ORDER . The notice u/s 274/271(1)(c) of the Act is not carrying the specific limb. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. Finally, respectfully following the binding judicial precedents as cited aforesaid, we are of the considered opinion that the impugned penalty is not sustainable on legal grounds. The issue was agitated before the ld. CIT(A) but the issue is not adjudicated in appeal order. The ld. DR is unable to submit any contrary judgment before the bench. Hence, penalty U/s 271(1)(c) is quashed. We allow the appeal of the assessee. Issues Involved:
1. Validity of the penalty notice u/s 271(1)(c) of the Income-tax Act, 1961. 2. Enhancement of penalty rate by the CIT(A). 3. Deletion of penalty by the CIT(A) and whether it was justified. Summary: 1. Validity of the Penalty Notice u/s 271(1)(c): The assessee contended that the penalty notice issued by the Assessing Officer (AO) u/s 271(1)(c) was defective as it did not specify whether the penalty was for "concealment of income" or for "furnishing inaccurate particulars of income." The Tribunal noted that the AO's notice was ambiguous and lacked the necessary details to inform the assessee of the precise charge. Citing the jurisdictional High Court's decision in the case of Mohammed Farhan A. Shaikh Vs. PCIT (125 taxmann.com 253), the Tribunal held that an omnibus notice suffers from vagueness and is invalid. Therefore, the penalty proceedings were quashed on legal grounds. 2. Enhancement of Penalty Rate by CIT(A): The assessee argued that the CIT(A) erred in enhancing the penalty rate from 100% to 200% without providing an opportunity for a hearing. The Tribunal did not specifically address this issue in the judgment, as the primary focus was on the validity of the penalty notice itself. 3. Deletion of Penalty by CIT(A): The Revenue challenged the deletion of the penalty by the CIT(A), arguing that the penalty u/s 271(1)(c) was justified due to the assessee's failure to offer certain incomes to tax. The Tribunal, however, found that the penalty notice was defective and thus invalid. Consequently, the Tribunal upheld the deletion of the penalty by the CIT(A) and dismissed the Revenue's appeal. Conclusion: The Tribunal allowed the appeal of the assessee, quashing the penalty u/s 271(1)(c) due to the defective notice, and dismissed the Revenue's appeal challenging the deletion of the penalty by the CIT(A).
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