The Tax Publishers2021 TaxPub(DT) 0511 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Where show cause notice issued under section 274 read with section 271(1)(c) did not mention under which limb of section 271(1)(c), the penalty was levied, i.e., whether the penalty was levied for concealment of income or for furnishing of inaccurate particulars of income, the penalty notice itself was bad in law and hence, the penalty levied under section 271(1)(c) would not be sustainable.

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

AO levied penalty under section 271(1)(c) upon assessee-company. Assessee submitted that show cause notice issued under section 274 read with section 271(1)(c) did not mention under which limb of section 271(1)(c), the penalty was levied, i.e., whether the penalty was levied for concealment of income or for furnishing of inaccurate particulars of income, therefore, the penalty levied under section 271(1)(c) was not justified. Held: On perusal of show cause notice issued under section 274 read with section 271(1)(c), it was found that there was no specific charges related to concealment of income or furnishing of inaccurate particulars of income. Therefore, it could be said that the AO was not sure under which limb of provisions of section 271(1)(c), the assessee was liable for penalty and accordingly, the penalty notice itself was bad in law. Besides that, the assessment order also did not specify the charge as to whether there was concealment of income or furnishing of inaccurate particulars of income in assessee's case. Hence, the penalty levied under section 271(1)(c) was not sustainable.

REFERRED : MAK Data Pvt. Ltd. v. CIT (2013) 358 ITR 593 (SC) : 2013 TaxPub(DT) 2358 (SC), Pr. CIT & Ors. v. Sahara India Life Insurance Company Ltd. [ITA No.475/2019 vide Order, dated 02-8-2019) : 2019 TaxPub(DT) 6933 (Del-HC), CIT v. SSA'S Emerald Meadows (2016) 73 Taxman.com 241(Karn) ; 2018 TaxPub(DT) 953 (Karn-HC), CIT & Ors. v. Manjunatha Cotton & Ginning Factory & Ors. (2013) 359 ITR 565 (Karn) : 2014 TaxPub(DT) 202 (Karn-HC) and CIT & Anr. v. SSA'S Emerald Meadows (2016) 73 Taxman.com 248 (SC) : 2016 TaxPub(DT) 4242 (SC).

FAVOUR : In assessee's favour.

A.Y. : 2008-09



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