Dhirendra Tyagi v. ITO - Taxpublishers.in

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The Tax Publishers2021 TaxPub(DT) 1899 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where AO levied penalty for furnishing of inaccurate particulars of income and the CIT(A) confirmed penalty for concealment of income, in view of the said inconsistency and various judicial decisions cited in favour of assessee, AO was directed to delete the penalty levied under section 271(1)(c).

Penalty under section 271(1)(c) - Validity - Non-recording of satisfaction -

Assessee filed appeal against the order of CIT(A) confirming penalty levied under section 271(1)(c) on the ground that AO levied penalty for furnishing of inaccurate particulars of income and the CIT(A) confirmed the penalty for concealment of income. Held: In the penalty order, the AO levied penalty for furnishing of inaccurate particulars of income and the CIT(A) confirmed the penalty for concealment of income. Thus, it was apparent that at the time of assessment order and issue of show cause notice for levy of penalty, the assessee was not made aware about any specific charge. Further, the issue was squarely covered by the decision in case of Pr. CIT v. Sahara India Life Insurance Corporation of India Ltd. ITA No. 4075/Del/2019 dt. 2-8-2019 : 2019 TaxPub(DT) 6933 (Del-HC),. wherein it had been held that notice issued for imposing the penalty would be bad in law if it does not satisfy the specific charge under which the penalty proceedings had been initiated, i.e., for concealment of income or for furnishing of inaccurate particulars of income. Same was also in case of CIT v. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 : 2014 TaxPub(DT) 202 (Karn-HC), wherein it has been held that the notice issued by the AO would be bad in law if it did not specify for which limb of section 271(1)(c), penalty proceedings were initiated. It was further followed in another decision in case of CIT v. SSA's Emerald Meadows (2018) 386 ITR 13 (Karn) : 2018 TaxPub(DT) 953 (Karn-HC) which has also been upheld by Supreme Court. Such view was also taken by Bombay High Court in CIT v. Samson Perincherry (2017) 392 ITR 4 (Bom) : 2017 TaxPub(DT) 672 (Bom-HC). Thus, present case was squarely covered by all the above judicial precedents, the issue was decided in favour of the assessee.

Pr. CIT & Ors. v. Sahara India Life Insurance Company, Ltd. ITA No. 4075/Del/2019 dt. 2-8-2019 : 2019 TaxPub(DT) 6933 (Del-HC), CIT v. Samson Perinchery (2017) 392 ITR 4 (Bom) : 2017 TaxPub(DT) 672 (Bom-HC) and CIT v. Ssa's Emerald Meadows (2018) 386 ITR 13 (Karn) : 2018 TaxPub(DT) 953 (Karn-HC) and CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 : 2014 TaxPub(DT) 202 (Karn-HC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. :

IN THE ITAT, DELHI BENCH