Case Law Details
ITO Vs Shri Bimal Talukdar (ITAT Guwahati)
The issue under consideration is whether the penalty proceeding u/s 271(1)(c) initiated by the AO sustain Under Income Tax Law?
In the present case, the ITAT earlier had allowed the appeal of the assessee and cancelled the penalty levied u/s. 271(1)(c) of the Act by taking note of the invalid notice, since the AO failed to specify the charge by striking down the irrelevant fault/charge i.e. “having concealed the particulars of income or furnishing inaccurate particulars of such income”. Now the revenue filed an application before the Court where it was contended that the AO had found in the assessment order itself that assessee had faulted on both the charges i.e. having concealed particulars of income as well as furnished inaccurate particulars of such income. Therefore, according to revenue, there is a difference in the facts of the case and the aforesaid case laws cannot be applied.
ITAT states that sometimes in some cases, it may attract both the offenses and in some cases there may be overlapping of the two charges, then in such event in the penalty proceedings also notice should clearly specify the same by adding the adjunctive ‘and’ and not the disjunctive ‘or’. The omission of the AO to strike off ‘or’ between the two charges and write/add ‘and’ in between both the charges makes the notice vague. Moreover, it has to be kept in mind that the assessment proceeding is distinct from the penalty proceedings and it is a settled law that imposition of penalty is discretionary and not mandatory. Therefore, any observation or finding made in the assessment order cannot come to the rescue of the AO’s action of issuing defective/vague penalty notice.
Accordingly the appeal filed by the revenue dismissed.
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