INCOME TAX ACT, 1961

Section 271(1)(c)

Penalty under section 271(1)(c) - Concealment of income or furnishing inaccurate particulars of income - AO initiated penalty and issued notice under section 274 - No specific mention of the purpose for which notice was issued

On conclusion of assessment proceedings, the AO initiated penalty proceedings and levied penalty under section 271(1)(c) of the Act for furnishing inaccurate particulars of income. In course of appellate proceedings, it was submitted on behalf of the assessee that the AO issued notice under section 274 read with section 271(1)(c) without specifying whether the penalty is levied for concealment of income or furnishing of inaccurate particulars of income. Held: In view of the fact that the AO did not strike out the inapplicable portion of the printed notice, leaving ambiguity in place as to whether the penalty proceedings were initiated for concealment of income or for furnishing inaccurate particulars of the income, the notice is held as defective and the whole proceedings have become null and void. In fact, the routine, ritualistic practice of issuing omnibus show-cause notices highlights non-application of mind on the part of the AO.

Followed:Dilip N. Shroff Vs. Jt. CIT & Anr. 2007 TaxPub(DT) 1247 (SC), Rajesh Kumar & Ors. v. Dy. CIT & Ors. (2007) 27 SCC 181 : 2006 TaxPub(DT) 1850 (SC), State of Orissa v. Binapani Dei & Ors. AIR 1967 SC 1269, Mohd. Farhan A. Shaikh v. Dy. CIT (2021) 434 ITR 1 (Bom-HC) : 2021 TaxPub(DT) 1503 (Bom-HC), CIT v. Kaushalya & Ors. 1995 TaxPub(DT) 109 (Bom-HC) and Bhavya Shashank Shanbhag v. Dy. CIT [ITA No. 4630Mum/2019 vide Order dt. 9-7-2021] : 2021 TaxPub(DT) 3544 (Mum-Trib).

REFERRED :

FAVOUR : In favour of assessee.

A.Y. :

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