Smt. Dayawanti Vs DCIT (ITAT Delhi)
ITAT Delhi held that notice under section 274 r.w.s. 271(1)(c) of the Income Tax Act issued without specifying the specific charge or limb i.e. without striking off the irrelevant limb is erroneous. Accordingly, penalty order u/s. 271(1)(c) cannot be sustained.
Facts- The assessment order came to be passed against the Assessee by making addition on account of trading results of Rs. 22,36,679/- and on account of unexplained credit of Rs. 4,52,488/-. A penalty proceeding has been initiated u/s 271(1)(c) of the Act and order of penalty came to be passed on 31/03/2011 by imposing penalty at 100% at Rs. 7,52,866/-. CIT(A) vide order dated 29/01/2014 dismissed the appeal filed by the Assessee. Being aggrieved, the present appeal is filed.
Conclusion- Hon’ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT [(2021) 434 ITR 1 (Bom)] while dealing with the issue of non-strike off of the irrelevant part in the notice issued u/s.271(l)(c) of the Act, 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.
Held that Hon’ble Bombay High Court (Goa) squarely applies to the facts of the Assessee’s case as the notice u/s. 274 r.w.s. 271(l)(c) of the Act was issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued. Thus, by following the above ratio, we are of the opinion that, the penalty order passed u/s 271(1)(c) of the Act by the Assessing Officer and the order of the CIT(A) in confirming the penalty order are erroneous.
