Priority Jewels Private Limited Vs CIT Appeals (ITAT Mumbai)
ITAT Mumbai held that notice issued u/s. 274 r.w.s. 271(1)(c) of the Income Tax Act without specifying the particular limb is unsustainable in law. Accordingly, the penalty imposed u/s. 271(1)(c) is not sustainable.
Facts- The assessment was completed u/s. 143(3) of the Act and the total income sought to be evadedamount to Rs 33,10,243/- related to the disputed purchases. The penalty proceedings was initiated u/s. 271(1)(c) of the Act and the notice u/s. 274 r.w.s. 271(1)(c) was duly issued and served. After hearing the same, the penalty was levied @100% of the tax sought to be evaded amount to Rs.10,74,010/-. CIT(A) upheld the penalty order. Being aggrieved, the present appeal is filed.
Conclusion- AO has issued the notice without mentioning the specific limb in the notice issued under section 274 read with section 271((1)(c) of the Act. In the assessment order also, the particular limb was not mentioned.
Held that the notice u/s 274/271(1)(c) of the Act is not carrying the specific limb as well as in assessment order also. Therefore, this is a case where both the parts of the offences i.e., concealment of income as well as furnishing of inaccurate particulars of income were involved. Finally, respectfully following the binding judicial precedents as cited aforesaid, we are of the considered opinion that the impugned penalty is not sustainable on legal grounds. Hence, by deleting the same, we allow the appeal of the assessee.
