| The Tax Publishers2022 TaxPub(DT) 0371 (Del-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where AO did not strike off inappropriate words in notice issued under section 274 read with section 271(1)(c) and the notice did not indicate the proper charge, i.e., under which limb of section 271(1)(c), the penalty proceedings had been initiated; the penalty proceedings were not in accordance with the law and hence, the penalty levied under section 27(1)(c) was liable to be deleted.
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Penalty under section 271(1)(c) - Leviability - Defective notice - AO did not strike off inappropriate words in notice-Non-specification of charge
Assessee-company was engaged in business of acquiring agricultural land and converting the same into land use, plotting the same into residential and commercial by giving various offers and advertisements in newspapers. AO levied penalty under section 271(1)(c) on account of concealed income in respect of unexplained investment and undeclared interest income. Assessee submitted that there was no specific charge against it in penalty notice issued under section 274 read with section 271(1) since inappropriate words had not been struck off and even in the assessment order also, there was no specific charge against the assessee for concealment of income or furnishing of inaccurate particulars. Thus, according to the assessee, in absence of any proper charge by the AO in the penalty notice, the penalty levied under section 27(1)(c) was liable to be deleted. Held: In view of decision of High Court in the case of Pr. CIT & Ors. v. Sahara India Life Insurance Company, Ltd. [ITA No. 426/2019, Order dated 2-8-2019] : 2019 TaxPub(DT) 6933 (Del-HC), notice issued by AO is bad in law since it did not specify under which limb of section 271(1)(c), the penalty proceedings had been initiated, i.e., whether for concealment of income or for furnishing of inaccurate particular of income. In instant case, Since AO did not struck off inappropriate words in notice issued under section 274 read with section 271(1)(c) and the notice did not indicate the proper charge, i.e., under which limb of section 271(1)(c), the penalty proceedings had been initiated; the penalty proceedings were not in accordance with the law and hence, the penalty levied under section 27(1)(c) was accordingly, deleted.
Followed:Pr. CIT, & Ors. v. Sahara India Life Insurance Co. Ltd. [ITA No. 426/2019, Order dated 2-8-2019] : 2019 TaxPub(DT) 6933 (Del-HC).
REFERRED :
FAVOUR : In assessee's favour.
A.Y. : 2014-15
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