The Tax PublishersITA. No. 6651/Del./2015
2020 TaxPub(DT) 3969 (Del-Trib)INCOME TAX ACT, 1961
Section 271(1)(c)
Where 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, therefore, penalty notice issued under section 271(1)(c) was liable to be quashed.
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Penalty under section 271(1)(c) - Defective show cause notice - Notice issued by AO without specifying grounds of penalty - Validity
AO made certain additions on account of loss of sale of fixed assets which was not added back in the computation of income, for prior period expenses which were not added back in the computation of income and for claiming deductible expenses by treating these expenses as amortisable under section 35D, however, these expenses were to be treated as capital expenses, as they did not come out under the definition of “amortisable expenses” as given in Section 35D(2). AO 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. Held: AO while making the additions held that assessee had furnished inaccurate particulars of income. However, in the penalty order, AO levied the penalty for concealment of particulars of income. From perusal of show cause 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:Pr. CIT & Ors. v. Sahara India Life Insurance Company Ltd. 2019 TaxPub(DT) 6933 (Del-HC) CIT v. SSA'S Emerald Meadows (2018) 73 taxmann.com 241 (Karn) : 2018 TaxPub(DT) 0953 (Karn-HC) CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2014) 359 ITR 565 (Kar) : 2014 TaxPub(DT) 0202 (Karn-HC) 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. : 2011-12
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