Aahvan Agencies Limited Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that notice issued u/s. 274 without specifying ground for imposition of penalty u/s. 271(1)(c) i.e. whether penalty is imposed for concealment of income or furnishing of inaccurate particulars of income is not justifiable. Accordingly, penalty u/s. 271(1)(c) set aside.
Facts- The Assessing Officer made disallowance of loss on derivatives amounting to Rs.81,84,285/-. Consequent to the disallowance, penalty u/s 271(1)(c) has been levied by the Assessing Officer. Confirming imposition of penalty is being contested by the assessee vide the present appeal.
Conclusion- Karnataka High Court: CIT vs. Manjunatha Cotton and Ginning Factory: 359 ITR 565 held that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy requirement of law.
Held that since the Assessing Officer has not been specified u/s 274 as to whether penalty is proposed for alleged ‘concealment of income’ OR ‘furnishing of inaccurate particulars of such income’, the penalty levied is hereby obliterated. Accordingly, the appeal is allowed.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD



