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2022 (4) TMI 33 - AT - Income TaxLevy of penalty u/s 271(1)(c) - defective notice u/s 274 - non specification of clear charge - addition of unexplained cash deposits in the bank account - - HELD THAT:- Notice u/s. 274 r.w.s. 271(1)(c) of the Act is to be issued to the assessee. The aforesaid notice should specifically indicate on which ground penalty is sought to be imposed, whether for concealment of income or for furnishing inaccurate particulars of income. In the present case, the perusal of assessment order passed by the AO reveals that in the Assessment Order, no specific finding has been recorded by the AO as to whether it is a case of concealment of income or a case of furnishing of inaccurate particulars of income. In the notice dated 26.12.2016, issued under Section 274 read with Section 271 of the Act, the copy of which is placed at page 2 of the paper book, the inapplicable portion or limb of Section 271(1)(c) of the Act has not been struck off. It is a settled law that the two limbs i.e. “concealment of particulars of income” and “furnishing of inaccurate particulars of income” carry different connotations. Various High Courts have held that Assessing Officer must indicate in the notice for which of the two limbs he proposes to impose the penalty and for this the notice has to be appropriately marked. If in a printed format of the notice the inapplicable portion is not struck off thus not indicating for which limb the penalty is proposed to be imposed, it would lead to an inference as to non application of mind, thus vitiating imposition of penalty. As relying on M/S. SAHARA INDIA LIFE INSURANCE COMPANY, LTD. [2019 (8) TMI 409 - DELHI HIGH COURT] penalty u/s 271(1)(c) was not leviable when the notice issued by AO did not specify as to whether the proceedings were initiated for concealment of particulars of income or for furnishing of inaccurate particulars of income. - Decided in favour of assessee.
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