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2021 (10) TMI 440 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - non specification of charge - whether assessee has concealed the particulars of income or has furnished inaccurate particulars of income? - HELD THAT:- Bare perusal of notice issued u/s 274 read with section 271(1)(c) shows that the AO has failed to specify in the show-cause notice if the assessee has concealed the particulars of income or has furnished inaccurate particulars of income. Issuance of valid notice in order to initiate the penal provisions as sine qua non for levying the penalty as this issue has been decided in the case of CIT vs. SSA’s Emerald Meadows [2015 (11) TMI 1620 - KARNATAKA HIGH COURT]. Hon’ble Apex Court in case of CIT vs. SSA’s Emerald Meadows [2016 (8) TMI 1145 - SC ORDER] while dismissing the SLP filed by the Revenue quashing the penalty by the Tribunal as well as Hon’ble High Court on ground of unspecified notice held that notice issued by Assessing Officer under section 274 read with section 271 (1 )(c) was bad in law, as it did not specify under which limb of section 271 (1 )(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. When the assessee has disclosed all the particulars in the return of income claiming certain expenses, however found to be not allowable, it would not amount to furnishing of inaccurate particulars of income to attract the penal provisions u/s 271(1)(c) of the Act, as has been held by Hon’ble Apex Court in the case of Reliance Petro Products Pvt. Ltd[2010 (3) TMI 80 - SUPREME COURT]. Also see MANJUNATHA COTTON AND GINNING FACTORY, MANJUNATH GINNING AND PRESSING, VEERABHADRAPPA SANGAPPA AND CO., V.S. LAD AND SONS, G.M. EXPORT [2013 (7) TMI 620 - KARNATAKA HIGH COURT] AO has miserably failed to specify in the notice issued under section 274 read with 271(l)(c) of the Act, "as to whether the assessee has concealed the particulars of his income or has furnished inaccurate particulars of such income”, and also merely making a claim which is not sustainable in law by itself, as in the present case, assessee’s expenditure has been disallowed by the AO, would not amount to furnishing of inaccurate particulars of income. - Decided in favour of assessee.
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