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 - Imposition of

AO, during the course of assessment proceedings, noticed that assessee had claimed full depreciation at the applicable rates even in case of assets, which were put to use for less than 180 days. AO, therefore, allowed 50% depreciation as was admissible and 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 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 v. Reliance Petro Products (P.) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) K.C. Builders v. ACIT (2004) 256 ITR 562 (SC) : 2004 TaxPub(DT) 1323 (SC) Principal CIT v. Neeraj Jindal (2017) 393 ITR 1 (Del.) : 2017 TaxPub(DT) 0816 (Del-HC) CIT and ITO, Bangalore v. SSA'S Emerald Meadows (2016) 73 Taxmann.com 241 (Karn) : 2018 TaxPub(DT) 0953 (Karn-HC) CIT v. Zoom Communication (2010) 327 ITR 510 (Del.) : 2010 TaxPub(DT) 1957 (Del-HC) and CIT & Anr. v. SSA'S Emerald Meadows (2016) 73 Taxmann.com 248 (SC) : 2016 TaxPub(DT) 4242 (SC)

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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