The Tax Publishers2020 TaxPub(DT) 4055 (Jp-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Since in show-cause notice issued under section 274 read with section 271(1)(c), the AO had not initiated the penalty on a specific charge and talked about either concealment of income or furnishing of inaccurate particulars of income, however, while levying the penalty, the AO talked about both concealment of income and furnishing of inaccurate particulars of income; it was a case of lack of application of mind by the AO both at the time of initiation and final levy of penalty. Hence, the penalty levied under section 271(1)(c) was liable to be deleted.

Penalty under section 271(1)(c) - Leviability - Defective notice - Non-specification of charge

AO levied penalty under section 271(1)(c). It was submitted on behalf of assessee that the show cause notice issued under section 274 read with section 271(1)(c) was not at all clear as to for what precise charge, the assessee was asked to show cause viz. whether the charge was that the assessee had furnished inaccurate particulars of income or it was for concealing particulars of such income, in as much as the said show cause notice clearly revealed that the inappropriate words/unwanted charge had not been struck off. Held: In the show-cause notice issued under section 274 read with section 271(1)(c), the AO had not initiated the penalty on a specific charge and talked about either concealment of income or furnishing of inaccurate particulars of income. However, while levying the penalty, the AO talked about both concealment of income and furnishing of inaccurate particulars of income. Further, the AO had not specified in the penalty order as to how it was a case of applicability of both the charges in the facts and circumstances of the instant case. Therefore, it was a case of lack of application of mind by the AO both at the time of initiation and final levy of penalty and the AO had failed to give a decisive finding even at the time of passing the penalty order. Hence, the penalty order so passed under section 271(1)(c) was vitiated for want of specific charge for levy of penalty and accordingly, the penalty so levied was deleted.

Followed:Sheveta Construction Co. (P) Ltd. v. ITO (in DB No. 534/2008 vide Order, dated 6-12-2016) .

REFERRED : HPCL Mittal Energy Ltd. v. Addl. CIT (2018) 97 taxmann.com 3 (Amritsar-Trib.) (TM) : 2018 TaxPub(DT) 4920 (Asr-Trib).

FAVOUR : In assessee's favour

A.Y. : 2008-09



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