Case Law Details
Sh. Prem Pal Gandhi Vs ACIT (ITAT Amritsar)
The appellant objected to the levy of penalty as bad in law. He challenged that the AO has not mentioned under which limbs of section 27 1(1)(c) of the Act, whether for concealment of income or furnishing of inaccurate particulars, the penalty was initiated. Thus, He has not recorded required satisfaction as per law. Similarly, he further challenged that notice issued under section 274 read with section 271 of the Act, dated 17/08/2012 (page 7 of paper book) does not mention about the limb for which it is initiated.
A.O. forms opinion that it is fit case for levy penalty under section 271(l)(c) of the Act by holding the assessee is being guilty of furnishing inaccurate particulars of income. The AO further stated that the total income with respect to which inaccurate/concealed particulars of income have been furnished is Rs. 5,20,000/- and accordingly, he was satisfied that income assessed as mentioned above was not bonafide but with the malafide intention of evading the tax by furnishing an inaccurate/concealed particular of income.
In the case on hand, we find that at the first instance, while replying to the penalty show cause notice dated 17/08/2012, the assessee raised a specific plea that there was no concealment of income, that he had not furnished inaccurate particulars of income and that the notice was not proper. Therefore, the phraseology, which was adopted by the assessee, if read as a whole, would clearly show that he had objected to the issuance of the notice and as there was no basis for issuance of the notice under Section 271(1)(c) of the Act, both limbs in the said provision do not get attracted.
In the case of “Mohd. Farhan A. Shaikh Vs. DCIT”, [2021] 125 taxmann.com 253 (Bombay) held that where assessment order clearly records satisfaction for imposing penalty on one or other, or both grounds mentioned in section 271(1)(c), a mere defect in notice, not striking off irrelevant matter would vitiate penalty proceedings vide Para 188 by observing as under:
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