Dwarka Prasad Tayal Vs ITO (ITAT Indore)
The appeal before the ITAT Indore concerned an assessee’s challenge to a penalty of Rs.30,00,000 imposed under Section 271(1)(c) of the Income Tax Act, 1961 for A.Y. 2011-12. The appeal was directed against the order of the First Appellate Authority dated 07.07.2014, arising from the penalty proceedings initiated by the Assessing Officer. The assessee raised a legal objection that the show-cause notice dated 07.07.2014 issued under Section 274 read with Section 271(1)(c) was defective because the Assessing Officer had not specified the particular charge against the assessee by striking off the inapplicable limb—whether concealment of particulars of income or furnishing of inaccurate particulars of income. The assessee relied on the decision of the jurisdictional High Court in CIT vs. Kulwant Singh Bhatia, ITA Nos. 910,11,12,13 & 14 of 2018, order dated 09.05.2018, and the ITAT decision in Dhanjraj Distributors Pvt. Ltd. vs. DCIT, ITA No. 950/Ind/2019 dated 22.06.2023.
The Departmental Representative supported the order of the CIT(A) and submitted that the Assessing Officer’s failure to strike off the inapplicable limb was merely clerical and should not invalidate the penalty proceedings.
The Tribunal noted that the assessee was an individual and that assessment under Section 143(3) for A.Y. 2011-12 had been completed on 07.07.2014, determining income at Rs.4,73,51,720. The Assessing Officer had assessed business income at 5% of turnover and made additions for undisclosed investment and undisclosed business. The assessee succeeded in the quantum proceedings. However, additional income offered through a revised computation was treated by the Assessing Officer as furnishing inaccurate particulars of income, leading to initiation of penalty proceedings under Section 271(1)(c).
