INCOME TAX ACT, 1961

Section 271(1)(c) Section 274

Penalty under section 271(1)(c) - Leviability - Non-specification of charge in notice under section 274 -

AO observed that all the facts relating to the alleged additions made in question and thus material to the computation were not suo motu disclosed. Hence, he imposed penalty under section 271(1)(c) vide Order, dt. 29-9-2016. Assessee pleaded that no specific show cause notice had been issued to the assessee by the AO and therefore, the penalty levied was without jurisdiction. He stated that from notice, it was clear that no satisfaction had been recorded by the AO that under which charge the penalty was leviable, i.e., on account of concealment of income or furnishing of inaccurate particulars. Held: After perusing the penalty notice the AO was not clear under which charge the penalty was leviable, i.e., whether it was on account of concealment of income or furnishing of inaccurate particulars. Hence, the AO had initiated the penalty for concealment of particulars of income or furnishing of inaccurate particulars, which was contrary to the provisions of law and against the spirit of the various decisions of the Supreme Court and High Court. Penalty in dispute was, therefore, not sustainable in the eyes of law.

Followed:CIT v. CIT & Ors. v. Manjunatha Cotton and Ginnig Factory & Ors. (2013) 359 ITR 565 (Karn) : 2014 TaxPub(DT) 202 (Karn-HC), CIT & Anr. v. M/s. SSA's Emerald Meadows in (Special Leave to Appeal (C)....../2016 (CC No. 11485/2016), dt. 5-8-2016) : 2016 TaxPub(DT) 4242 (SC), Ashok Kumar Chordia v. DCIT passed in ITA No. 5788 to 5790/Del/2014 and Rajender Jain v. Asstt. CIT passed in ITA No. 6804/Del/2013.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2013-14

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