Case Law Details
I.G. International Pvt Ltd Vs ACIT (ITAT Mumbai)
The case of I.G. International Pvt Ltd Vs ACIT, brought before ITAT Mumbai, delves into a pivotal aspect of penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961. The contention revolves around the issuance of an unambiguous notice by the Assessing Officer, focusing on whether the notice was defective, thereby vitiating subsequent penalty proceedings.
Representing the assessee, Shri Ashok Mehta argued that the notice under section 274 read with section 271(1)(c) of the Act was defective as it cited both limbs of section 271(1)(c) without striking off the irrelevant clause. To back his argument, he referred to the decision of the Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. ACIT.
In contrast, the Departmental Representative, Shri V.S.Mahajan, defended the impugned order, maintaining that the assessee had erroneously claimed a deduction under section 35D, hence the penalty under section 271(1)(c) was justified.
Upon review, ITAT Mumbai found that the Assessing Officer demonstrated ambiguity while issuing the notice, failing to specify whether the penalty was for “concealment of particulars of income” or “furnishing inaccurate particulars of income”. The tribunal, referring to the precedent of Mohd. Farhan A. Shaikh vs. ACIT, held that the ambiguity of the charge was sufficient to vitiate the penalty proceedings.
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