Case Law Details
Shivaji Dattatray Sonawane Vs ITO (ITAT Pune)
Introduction: The ITAT Pune’s recent judgment in Shivaji Dattatray Sonawane vs ITO sheds light on a crucial tax dispute. The appellant contested that a penalty notice for concealment resulted in an inaccurate particulars penalty. Delve into the details of this case and its legal implications.
Detailed Analysis: The crux of the matter lies in the dichotomy between the notice for concealment of income and the subsequent penalty for furnishing inaccurate particulars. The ITAT, drawing on legal precedents, emphasizes that penalty and assessment proceedings must align. A lack of clarity in the initiation and satisfaction by the Assessing Officer renders the penalty void ab initio.
The order cites judgments from Gujarat, Delhi, Karnataka, and Bombay High Courts, underscoring the AO’s duty to specify the charge – concealment or inaccuracy. The satisfaction of the AO, a prerequisite for penalty under Section 271(1)(c), is deemed absent in this case. The jurisdictional flaw is equated with a defective assumption of jurisdiction, citing legal precedents.
The principle of natural justice is invoked, asserting that the assessee must be apprised of the precise charge. Ambiguity in the notice renders the penalty unjustified. Legal decisions, including CIT v. Lakhdhir Lalji, Padma Ram Bharali v. CIT, and K. M. Bhatia v. CIT, are invoked to bolster the argument that penalty should align with the notice’s basis.
Please become a Premium member. If you are already a Premium member, login here to access the full content.
