Shiva Preservation Pvt. Ltd. Vs ITO (ITAT Agra)
Penalty Invalid When Both Charges Are Clubbed- Concealment vs Inaccurate Particulars — ITAT Says AO Must Choose One, Not Both- ITAT Agra Deletes 271(1)(c)
Agra Tribunal deleted the penalty u/s 271(1)(c) relating to an addition of ₹4,25,000 made as unexplained cash credit u/s 68 towards share application money. AO, in both the assessment order & the penalty notice u/s 274, stated that the Assessee had “concealed income & furnished inaccurate particulars”, thereby invoking both limbs of section 271(1)(c). The quantum addition had already been sustained up to ITAT.
Before the Tribunal, the Assessee argued—relying on multiple Delhi High Court decisions including PCIT v. Gargerious Projects Pvt. Ltd., PCIT v. Sara Sae Pvt. Ltd., & PCIT v. Virtual Software & Training Pvt. Ltd.—that penalty cannot survive when the Revenue issues ambiguous or dual charges, since concealment & furnishing inaccurate particulars are distinct offences requiring AO to specify which limb is invoked. The Tribunal agreed, noting that penalty proceedings are quasi-criminal in nature & must be based on a clear, specific, unambiguous charge.
Holding that the AO’s penalty was invalid on this technical defect, the Tribunal directed deletion of the penalty without commenting on merits of the underlying addition.
