D.K. Industries Vs ITO (ITAT Kolkata)
ITAT Kolkata held that issuance of penalty notice under section 271(1)(c) without specifying the correct limb for imposition of penalty is invalid. Accordingly, order passed thereon is liable to be quashed.
Facts- A proceeding u/s 271(1) (c) of the Act was initiated against the assessee as during the assessment proceedings u/s 143(3) of the Act it was seen that in the ABN Amro Bank account of the assessee a cash amounting to Rs. 20 Lakh was deposited. Assessee has been asked to furnish explanation and AO after considering the explanation of the assessee has held that assessee concealed particulars of income of deposited cash in the bank account without satisfactory explanation and hence, penalty proceeding u/s 271(1) (c) of the Act was initiated for deliberately furnishing inaccurate particular of income. The said order of penalty proceeding has been placed by the assessee before CIT(A) wherein also appeal of the assessee has been dismissed. Being aggrieved, the present appeal is filed.
Conclusion- Held that AO has passed an order u/s 271(1) (c) of the Act on two limbs; (i) concealed particulars of income and (ii) furnishing inaccurate particulars of income. Accordingly, we are in this opinion that penalty notice dated 08.03.2013 issued in this case suffers from infirmity that lack of satisfaction and lack of notice being issued in making the assessee aware regarding exact charge against him and hence, the same is liable to be quashed. Accordingly, the order of AO confirmed by the ld. CIT(A) with respect to penalty proceeding is hereby set aside.
