Sony Dadc Manufacturing (India) (P) Ltd. v. Asstt. CIT

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The Tax Publishers2019 TaxPub(DT) 3955 (Mum-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where AO had failed to state particularly the one of the two limbs on which penalty was proposed to be levied, then penalty order would be bad in law as assessee was not given proper opportunity to respond to the charge on which the penalty was levied.

Penalty under section 271(1)(c) - Leviability - Notice issued without mentioning appropriate limb -

AO initiated penalty proceedings in the assessment order for furnishing of inaccurate particulars of income and for concealment of income by issuing notice under section 274 read with section 271. Held: The notice was issued in a standard format without any application of mind and the inappropriate/redundant words were not deleted by AO. Thereafter, penalty was imposed for concealment of particulars of income by invoking Explanations 1 and 4 to section 271(1)(c). Thus, by these acts of AO in not striking off the inappropriate limb in the notice was clear-cut in violation of principles of natural justice as assessee was deprived of reasonable opportunity to respond and deal with the particular charge on which penalty was levied. Therefore, the penalty order in such a scenario was clearly bad in law and could not be sustained.

Relied:Samson Perinchery v. CIT [(2017) 392 ITR 4 (Bom HC) : 2017 TaxPub(DT) 0672 (Bom-HC)] and CIT v. Mrs. Piedade Perinchery (Bom-HC) [[Income Tax Appeal No. 1310 of 2014, dt. 10-1-2017]]

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