Case Law Details
Smt. Jayalakshmi Vs ITO (ITAT Bangalore)
The only disputed issue prima facie is in respect of levy of penalty u/s 271(1)(c) of the Act. The contention of the learned AR is that the AO has passed the penalty order without application of mind and referred to page 39 & 40 of the paper book where notice u/s 274 r.w.s. 271(1)(c) dated 31/12/2007 is enclosed. On perusal of the notice at page 40, as demonstrated by the learned AR, the AO has initiated penalty proceedings both for concealment of particulars of income and furnishing of inaccurate particulars of such income. We are of the opinion that penalty proceedings are attract ed only where the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is well accepted proposition that the aforesaid two limbs of section 271(1)(c) of the Act carry different meaning and the AO should be clear as to the limb under which penalty is being levied. When the AO proposes to invoke the first limb being concealment of income, notice has to be appropriately marked. But in the present case, as demonstrated before us, we found that the AO has marked the concealment of particulars of income and furnishing of inaccurate particulars of income. It is imperative and clear that the AO is not sure on which limb the penalty is being levied. Therefore, we considering the facts and legal position and passing of penalty order u/s 271(1)(c), found that there is no application of mind by the AO as he has marked both limbs of notice which is bad in law. Accordingly, we set aside the order of the CIT(A) and cancel the penalty order dated 31/12/2007 and allow the grounds of appeal of the assessee.
FULL TEXT OF THE ITAT JUDGEMENT
The assessee has filed appeal against the order of the CIT(A) passed u/s 271(1)(c) and 250 of the Income-tax Act,1961 [‘the Act’].
2. The assessee has raised the following grounds of appeal:
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