2018 (2) TMI 1958 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - AO levied the penalty on both the charges i.e. furnishing of inaccurate particulars of income as well as concealing the particulars of income - HELD THAT - As relied on the orders of the lower authorities but it was pointed out to him that how the AO can levy the penalty on both the charges i.e. for furnishing of inaccurate particulars of income as well as for concealing of particulars of income. The AO is not sure about specific charge for which the assessee is in default which is clear from above reproduced order of the AO regarding levy of penalty. In view of these facts we are of the view that the issue is covered by the decision of Hon ble Bombay High Court in the case of CIT vs Samson Perinchery 2017 (1) TMI 1292 - BOMBAY HIGH COURT . Respectfully following the decision of Hon ble Bombay High Court we allow this appeal of the assessee.

Summary

Issues:
Appeal against penalty under section 271(1)(c) of the Income Tax Act, 1961.

Analysis:
The case involved an appeal against the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The appellant, engaged in the business of supplying labor in civil construction, did not challenge the addition made during assessment proceedings. The penalty proceedings were initiated by the Assessing Officer (AO) for furnishing inaccurate particulars of income. The AO levied the penalty under section 271(1)(c) for both inaccurate particulars and concealing income. The AO emphasized the strict liability on the assessee for concealment or inaccurate particulars. The burden of proof was on the assessee to explain the additions made. The AO found discrepancies in the accounts and contract receipts, which the appellant failed to reconcile with evidence. As a result, the AO added these amounts to the appellant's income, leading to the penalty imposition.

The Commissioner of Income Tax (Appeals) upheld the AO's decision, prompting the appellant to appeal to the Tribunal. During the appeal, it was noted that the AO had levied the penalty for both furnishing inaccurate particulars and concealing income without specifying the specific charge. Citing a decision of the Hon'ble Bombay High Court, the Tribunal allowed the appeal, stating that the AO's lack of clarity on the specific charge for the penalty was not in line with legal requirements. Therefore, the Tribunal ruled in favor of the appellant, setting aside the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961.

In conclusion, the Tribunal allowed the appeal, emphasizing the importance of clarity in specifying the charges for imposing penalties under section 271(1)(c). The decision highlighted the need for a clear and specific charge to be established by the Assessing Officer to levy penalties accurately and in accordance with legal provisions.