| The Tax Publishers2020 TaxPub(DT) 0467 (Del-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where penalty order did not clearly specify under which limb of section 271(1)(c), the penalty was levied, such order would be considered as bad in law and hence, the penalty levied under section 271(1)(c) would not be sustainable.
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Penalty under section 271(1)(c) - Leviability - Non-specification of charge -
Assessee-company sold all its fixed assets in lump sum sale for Rs. 1.2 crores and offered the same to tax under the head 'capital gain' under section 50B as per the certificate in form No. 3CEA issued by the auditor and enclosed the same to the return of income. However, when AO issued show-cause notice to question the same, to avoid unwanted litigation, the assessee gave up its claim of slump sale and filed the revised computation of income as per the provisions of section 50C. Subsequently, AO levied penalty under section 271(1)(c) on the opinion that the assessee revised computation of income after detecting concealment by Revenue. Held: Penalty order did not reveal that AO undertook any new material that was suppressed by assessee. Further, it was not the case of the Revenue that the assessee did not reveal the auditor's report or its claim of slump sale under section 50B. Further, it could be seen that except the valuation covered by the stamp duty, there was nothing on record to show that the value of the slump sale was not Rs. 1.2 crores. Even according to the penalty order, immediately on the AO issuing show-cause notice, the assessee gave up the claim of slump sale and by way of revised computation of income accepted the opinion of the AO and paid the taxes thereon with interest. Moreover, the penalty order did not clearly specify under which limb of section 271(1)(c), the penalty was levied. Accordingly, the penalty levied under section 271(1)(c) was not sustainable.
REFERRED : CIT v. Reliance Petroproducts (P.) Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC) Principal CIT & Ors. v. Sahara India Life Insurance Company, Ltd. ITA No. 475/2019 : 2019 TaxPub(DT) 6933 (Del-HC) CIT & Ors. v. SSA'S Emerald Meadows (2016) 73 taxman.com 241 (Kar) : 2018 TaxPub(DT) 0953 (Karn-HC) CIT v. DCM Ltd. (2013) 359 ITR 0101 (Delhi) : 2013 TaxPub(DT) 2543 (Del-HC) CIT & Ors. v. Manjunatha Cotton and Ginning Factory & Ors. (2014) 359 ITR 565 (Kar) : 2014 TaxPub(DT) 0202 (Karn-HC)
FAVOUR : In assessee's favour
A.Y. :
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