INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment - Non-specification of charge on which penalty sought to be imposed -

Assessee filed appeal against levy of penalty under section 271(1)(c) submitting that AO in the show cause notice(s) issued before levy of the penalty had mentioned both the limbs of section 271(1)(c) for levy of the penalty, therefore, the show cause notices were invalid, bad in law and defective and as such entire penalty proceedings were vitiated and were liable to be quashed. Held: It is an admitted fact that before levy of the penalty, AO had issued show cause notice in all the years in which AO had mentioned both the limbs of section 271(1)(c), that is, assessee had concealed the particulars of his income or furnished inaccurate particulars of such income. Thus, AO had not mentioned as to for which limb of section 271(1)(c) penalty shall have to be levied against the assessee .It was held in the case of CIT v. SSAs Emerald Meadows (2016) 73 Taxman.com 241 (Karn-HC) : 2018 TaxPub(DT) 953 (Karn-HC) that notice issued by AO under section 274 read with section 271(1)(c) to be bad in law and it did not specify under which limb of section 271(1)(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income for furnishing inaccurate particulars of income. The said Judgment of Karnataka High Court was also confirmed by Supreme Court in case of CIT v. SSAs Emerald Meadows [SLP No. 11485 of 2016 Order, dated 5-8-2016 : 2016 TaxPub(DT) 4242 (SC)]. Also in Sahara India Life Insurance Co. Ltd. 2019 TaxPub(DT) 6933 (Del-HC), it was held that AO had issued invalid and defective notices under section 271(1)(c) read with section 274 before levy of the penalty. Therefore, following the said decisions entire penalty proceedings were vitiated and were liable to be quashed.

Followed:CIT v. SSAs Emerald Meadows [(2016) 73 Taxman.com 241 (Kar-HC) : 2018 TaxPub(DT) 953 (Karn-HC)], CIT v. SSAs Emerald Meadows [SLP No. 11485 of 2016 Order, dated 5-8-2016 : 2016 TaxPub(DT) 4242 (SC)] and Sahara India Life Insurance Co. Ltd. 2019 TaxPub(DT) 6933 (Del-HC).

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2009-10 to 2012-13

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