The Income Tax Appellate Tribunal (ITAT), Delhi bench headed via Mr Challa Nagendra Prasad, Judicial Member has discarded the imposition of penalty under section 271(1)(c) without citing a specific charge in the notice issued under section 274.
The petitioner, Mr Atul Kumar Bansal has furnished a petition with respect to the confirmation of the imposition of penalty via the first appellate authority under section 271 (1)(c) of the Income Tax Act, 1961.
The counsel for the petitioner laid on the decision of the Supreme court for the case of CIT Vs SSA’s Emerald Meadows mentioned that the initiation and the levy of the penalty under Section 271(1)(c) of the Act would be ineffective in law since there is no particular charge specified in the notice given under Section 274 read with section 271(1)(c) of the act as to whether the notice was circulated for hiding the income or filing wrong details of income.
The Authority, the Bombay High Court towards the case of Mr Mohd. Farhan A. Shaikh v. ACIT held that “assessee must be informed of the grounds of the penalty proceedings only through statutory notice and an omnibus notice suffers from the vice of vagueness”.
Hence the council sees that the department has been unable to tell the taxpayer about the related limb and charge for which the notices were being provided.
The council ruled that “we hold that the penalty order passed u/s. 271(1)(c) of the Act by the Assessing Officer is bad in law and accordingly, the penalty order passed u/s. 271(1)(c) of the Act for Assessment Years 2000-01 to 2003-04 is quashed”.
Advocate Mr V. K. Sabharwal and Mr Sumesh Swani have appeared for the appellant and revenue respectively.
