The Tax Publishers2019 TaxPub(DT) 2302 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where AO had issued the notice of penalty without specifying the grounds on which the same was imposed, imposition of penalty was unjustified, because this being a mandatory requirement could not be construed as a mere technical error.

Penalty under section 271(1)(c) - Disallowance of claim of depreciation - Notice issued by AO without specifying grounds of penalty - Validity

AO after completing assessment, made addition by disallowing the claim of depreciation on building as against returned income of assessee at Nil. Thereafter, AO had imposed penalty under section 271(1)(c) on assessee, who assailed the same contending that notice issued under section 274 did not specify the grounds on which penalty was imposed, i.e., whether for concealment of income or for furnishing inaccurate particulars. Revenue rejected contention of assessee holding that penalty could not be deleted merely because of a technical error in the show cause notice.Held: From perusal of notice, it was very much obvious that AO did not specify the grounds on which penalty was imposed. AO was required to specify that on which limb of section 271(1)(c), the penalty proceedings were initiated, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The notice, in fact, was in standard proforma without the irrelevant clauses therein being struck off. Thus, penalty was deleted.

Followed:CIT & ANR. v. SSA'S Emerald Meadows (2016) 73 taxmann.com 248 (SC) : 2016 TaxPub(DT) 4242 (SC), MAK Data (P) Ltd. v. CIT (2013) 38 Taxmann.com 448 (SC) : (2013) 358 ITR 593 (SC) : (2013) 263 CTR 1 (SC) : 2013 TaxPub(DT) 2358 (SC), UOI v. Dharamendra Textile Processors (2007) 295 ITR 244 (SC) : 2007 TaxPub(DT) 1387 (SC) and Dilip N. Shroff v. Jt. CIT & Anr. (2007) 291 ITR 519 (SC) : 2007 TaxPub(DT) 1247 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :



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