INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Defective notice - Notice issued by AO without specifying grounds of penalty - Validity

AO had imposed penalty under section 271(1)(c) on the 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 the perusal of the 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 [Special Leave to Appeal (C)....../2016 (CC No.11485/2016), dt. 5-8-2016] : 2016 TaxPub(DT) 4242 (SC) CIT-I v. Vegetable Products Ltd. (1973) 88 ITR 192 (SC) : 1973 TaxPub(DT) 0421 (SC) Pr. CIT-19 v. Murari Mohan Koley [ITAT No. 306 of 2017, G.A. No. 2968 of 2017, dated 18-7-2018] : 2018 TaxPub(DT) 5631 (Cal-HC) Maharaj Garage & Company v. CIT-II 2018 TaxPub(DT) 0471 (Bom-HC) CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn) : 2014 TaxPub(DT) 0202 (Karn-HC) Syamal Baran Mondal v. CIT (2011) 244 CTR 631 (Cal.) : 2011 TaxPub(DT) 2080 (Cal-HC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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