Mohit Batola Vs ACIT (ITAT Dehradun)
ITAT Dehradun Quashes 271(1)(c) Levy for Non-Specific Charge – Penalty Invalid Where AO Fails to Strike Off Irrelevant Limb- Vague 274 Notice Equals Non-Application of Mind
A search was conducted u/s 132 on the assessee, engaged in land development and real estate business, along with the Surya Builders group. Assessment was completed u/s 153A r.w.s.144 determining income at ₹1.88 crore against returned income of ₹12.72 lakh, followed by penalty of ₹8.46 lakh u/s 271(1)(c) for furnishing inaccurate particulars of income. Assessee contended that the penalty notices issued u/s 274 r.w.s. 271(1)(c) were defective as they did not specify whether the charge was for concealment or for furnishing inaccurate particulars, relying on CIT v. Manjunatha Cotton & Ginning Factory and SSA’s Emerald Meadows (SC).
Tribunal observed that both notices were issued in a standard format without striking off the inapplicable portion, leaving the assessee unaware of the exact allegation. Citing judicial precedents, it held that failure to specify the charge indicates non-application of mind, rendering the penalty proceedings invalid. Since the AO had not recorded clear satisfaction before initiating penalty, the levy u/s 271(1)(c) was quashed.
FULL TEXT OF THE ORDER OF ITAT DEHRADUN
The present appeal is filed by the assessee against the order dated 23.04.2024 by Ld. Commissioner of Income Tax (A)-3, Noida [“Ld.CIT(A)”] in Appeal No. CIT(A), Kanpur-4/10044/2009-10 passed u/s 250 of the Income Tax Act, 1961 [“the Act”] arising from the penalty order dated 09.03.2021 passed u/s 271(1)(c) of the Act pertaining to assessment year 2010-11.
