No law has been given in the said section of section 271(1)(c) of the Income Tax Act, 1961 and is deemed incorrect by The New Delhi bench ITAT on the penalty notice under income tax issued.
Penalty orders are being obtained by the taxpayer via the income tax department. Attacking the orders, the taxpayer said to the Tribunal that the notice on the date 25.03.2013 is allotted u/s 271(1)(c) read with section 274 of the Act is uncertain, as this will not mention which limb of section 27(1)(c) of the act, the penalty proceedings would be initiated that is whether towards the fabrication of income information or the furnishing of inaccurate income data, therefore a penalty is not payable.
The council mentioned that under the decision of the High court in several cases, the assessing officer asked to call on the first limb being concealment, then the notice needs to be specifically marked.
The Tribunal bench including T.S. Kapoor, Accountant Member, and Shri N. K. Choudhry, Judicial Member sees that the penalty provisions of section 271(1)(c) of the Act are drawn, in which the taxpayer has hidden the particulars of income or filed incorrect particulars of this income. The two limbs of section 271(1)(c) of the Act consist of different meanings. Hence it is essential for the assessing officer to mention the concerned limb so to make aware the taxpayer of the charge made with respect to him so that he would answer as per the same, Tribunal mentioned.
Revoking the penalty orders, the Tribunal ruled that posing regard to the way where the assessing officer provides the notice on 25.03.2013 beneath section 274 read with 271(1)(c) of the Act, by not mentioning the limbs beneath which the penalty proceedings has been executed and proceed through, this shows that the notice, in this case, was issued without applying mind to which is an offence in law, hence cannot be considered a valid notice sufficient to impose a penalty under section 271(1)(c) of the Act; thus, according to the various Courts including the Apex Court, the penalty cannot be imposed and we, therefore, delete the penalty imposed by the AO and affirmed by the Ld. Commissioner.
