Case Law Details
Chandu Laxman Chavan Vs DCIT (ITAT Pune)
While levying penalty, the Assessing Officer invoked only the charge of “furnishing inaccurate particulars of income”. It is evident that while recording satisfaction the Assessing Officer was not clear in his mind as to which charge u/s. 271(1) (c) is to be invoked for initiating penalty. The ambiguity in the mind of Assessing Officer with regard to charge u/s. 271(1)(c) for levy of penalty is evident writ large.
7. Ginning Factory reported as 359 ITR 565 has held the “assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty should be imposed to the assessee”. The manner in which the Assessing Officer has initiated penalty in the instant case clearly shows vagueness in the mind of Assessing Officer with regard to the charge to be invoked for levy of penalty u/s. 271(1)(c) of the Act. Thus, the satisfaction recorded by the Assessing Officer falls short of legal requirement as envisaged by the Hon’ble High Court. The Tribunal in various decisions has held such recording of satisfaction as unsustainable in the eye of law. Thus, we are of considered opinion that the penalty proceedings in this case are liable to be set aside on account of vagueness and ambiguity in recording of satisfaction.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-5, Pune dated 25-02-2016 for the assessment year 2005-06, confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”).
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