INCOME TAX ACT, 1961

Section 271(1)(c)

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

Assessee-company was engaged in business of construction. Penalty under section 271(1)(c) was levied upon the assessee. Assessee submitted that notice issued under section 271(1)(c) read with section 274 did not provide any specific charge for penalty, as it did not specify under which limb of section 271(1)(c), the penalty was levied. Further, the assessee submitted that whether the penalty was for concealment of income or furnishing of inaccurate particulars of income was neither evident from the notice nor from the penalty order and thus, the penalty would not be sustainable.Held: In notice issued under section 274 read with section 271(1)(c), there was no specific charges as related to concealment of income or furnishing of inaccurate particulars of income. Thus, 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 the penalty. 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 the assessee's case. Therefore, the notice under section 271(1)(c) read with section 274 itself, was bad in law and consequently, the penalty levied under section 271(1)(c) would not be sustainable and hence, the same was deleted.

Followed:CIT & Anr. v. SSA'S Emerald Meadows [SLP No. 11485 of 2016 Order, dated 5-8-2016] : 2016 TaxPub(DT) 4242 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2014-15

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