Garg Exports (India) v. ITO - Taxpublishers.in

SUBSCRIBE FOR FULL CONTENT

The Tax Publishers2021 TaxPub(DT) 3372 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where no satisfaction had been recorded for initiating penalty proceedings by AO, i.e., whether the penalty proceedings are initiated for concealment of income or for furnishing of inaccurate particulars of income, the same requires to be deleted being invalid in law.

Penalty under section 271(1)(c) - Notice under section 274 - Notice not specifying grounds on which penalty sought to be imposed -

Assessee filed appeal against the order of CIT(A) as he failed to appreciate that AO had not specified in the notice under section 271(1)(c) read with section 274, whether the penalty proceedings were initiated for concealment of income or for furnishing of inaccurate particulars of income. Held: There was no clarity of the charges for which penalty had been initiated. There was no mention as to, whether the penalty had been initiated for concealment of income or furnishing of inaccurate particulars of income. In the Notice for initiating penalty proceeding also, the relevant part as to concealment of income or furnishing of inaccurate particulars of income had not been ticked. In such circumstances, AO was not clear under which limb of section 271(1)(C), the penalty was initiated. In the case of CIT & Others v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn-HC) : 2014 TaxPub(DT) 0202 (Karn-HC), it was held that while issuing the notice under section 274 the AO has to come to conclusion as to whether it is a case of concealment of income or furnishing of inaccurate particulars of income and sending printed forms where all grounds as mentioned in section 271 were mentioned, would not satisfy requirement of law. In the case of CIT & Anr. v. SSA's Emerald Meadows (2016) 73 Taxmann.com 248 (SC) : 2016 TaxPub(DT) 4242 (SC), the apex Court has also upheld the finding of Karnataka High Court in the case of CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn-HC) : 2014 TaxPub(DT) 202 (Karn-HC). Following the same, penalty levied was held as bad in law and accordingly cancelled.

Followed:CIT & Others v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn-HC) : 2014 TaxPub(DT) 0202 (Karn-HC) and CIT & Anr. v. SSA's Emerald Meadows (2016) 73 Taxmann.com 248 (SC) : 2016 TaxPub(DT) 4242 (SC).

REFERRED :

FAVOUR : In favour of assessee.

A.Y. :

IN THE ITAT, DELHI BENCH