INCOME TAX ACT, 1961

Section 271(1)(c)

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

Penalty under section 271(1)(c) was levied upon assessee-company. Assessee submitted that irrelevant words in penalty notice had not been struck of, thus, the notice did not specify as to under which limb of section 271(1)(c) penalty was being initiated and failure to specify the charge for which the penalty had been initiated, would make the imposition of penalty unsustainable. Held: It was found that irrelevant words in penalty notice issued under section 274 had not been struck of, thus, the notice did not specify as to under which limb of section 271(1)(c) was the penalty being initiated. Further, the AO had been inconsistent in his approach regarding the imposition of penalty as in the assessment order, the AO recorded satisfaction for imposition of penalty for furnishing of inaccurate particulars of income, whereas in the notice issued under section 274, penalty proceedings had been initiated for concealing particulars of income/furnishing inaccurate particulars. Therefore, the notice issued under section 274 was bad in law, as it did not specify under which limb of section 271(1)(c), the penalty proceedings had been initiated, i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. Hence, the penalty levied under section 271(1)(c) was deleted.

Distinguished:Sundaram Finance Ltd. v. Asstt. CIT (2018) 403 ITR 407 (Mad) : 2018 TaxPub(DT) 2565 (Mad-HC)

REFERRED : CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2014) 359 ITR 565 (Karn) : 2014 TaxPub(DT) 0202 (Karn-HC).

FAVOUR : In assessee's favour

A.Y. : 2011-12

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