PCIT Vs Gragerious Projects Pvt Ltd (Delhi High Court)
Delhi High Court held that levy of penalty under section 271(1)(c) of the Income Tax Act without specifying the limb i.e. concealment of particulars of income or furnishing of inaccurate particulars of income not valid. Accordingly, penalty set aside.
Facts- Revenue has preferred the present appeal mainly contesting that whether the ITAT was justified in deleting the penalty u/s. 271(1)(c) of the Income Tax Act, 1961 by ignoring the fact that the Assessee had claimed inaccurate expenses imposed by the Assessing Officer on the Assessing Company for the reason that in the notice under Section 274 read with Section 271(1)(c), the AO has not marked the specified limb for which the penalty notice is issued, although, penalty was also imposed for furnishing inaccurate income as per the penalty order by the AO.
Conclusion- It is thus apparent that ordinarily the two phrases i.e. “conceal” and “furnishing of inaccurate particulars” are separate and distinct. Concealment of income and furnishing of inaccurate particulars of income in Section 271(1)(c) of the Act carry different meanings and connotation.
Karnataka High Court in the case of CIT v. Manjunatha Cotton & Ginning Factory observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income.
