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2019 (4) TMI 205 - AT - Income TaxPenalty u/s 271(1)(c) - Non specification of charge - not specially pointing out that whether the penalty was proposed on concealment of particulars of income, or for furnishing particulars of income - HELD THAT:- Perusal of the notice issued u/s 274 read with section 271(1)(c) in order to initiate the penalty proceedings against the assessee goes to prove that even at the stage of issuing the notice, AO was not aware as to whether he is issuing notice to initiate the penalty proceedings either for “concealment of particulars of income” or “furnishing of inaccurate particulars of such income” by the assessee rather issued vague and ambiguous notice by incorporating both the limbs of section 271(1)(c). When the charge is to be framed against any person so as to move the penal provisions into motion against him, he/she should be specifically made aware of the charges to be leveled against him/her. In the instant case, not only the notice issued to the assessee u/s 274 r.w.s. 271(1)(c) is defective but AO has not even made himself satisfied at the time of making disallowance / addition in assessment order if the assessee has furnished inaccurate particulars of income or has concealed particulars of his income rather to be on the safer side he has invoked both the limbs of section 271(1) of the Act. So, we are of the considered view that this is not merely a case of serving a defective notice under section 274 r.w.s. 271(1) on the assessee rather it is a case of non-application of mind on the part of the AO to make himself satisfied as to under which limb of section 271(1)(c) he is going to initiate/levy the penalty on the assessee. Penalty under section 271(1)(c) cannot be levied merely on the basis of fact that in the penalty order, the AO has rightly levied the penalty for furnishing inaccurate particulars of income because when very initiation of the penalty proceedings are vitiated, as discussed in the preceding paras, the penalty order is not sustainable. - Decided in favour of assessee.
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