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| The Tax Publishers2019 TaxPub(DT) 4816 (Mum-Trib) INCOME TAX ACT, 1961
Section 271(1)(c)
Where AO had issued the notice of penalty without specifying the grounds on which the same was imposed, imposition of penalty was unjustified, because this being a mandatory requirement could not be construed as a mere technical error.
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Penalty under section 271(1)(c) - Wrong claim of TDS not belonging to assessee but appeared in Form No. 26AS - Notice issued by AO without specifying grounds of penalty - Imposition of
AO observed that assessee had claimed TDS which includes a sum in respect of which the corresponding income was not offered by the assessee. The said TDS belonged to some other party and has been claimed by the said party in its return of income besides offering the corresponding income to tax. AO had imposed penalty under section 271(1)(c) on assessee who assailed the same contending that notice issued under section 274 did not specify the grounds on which penalty was imposed i.e., whether for concealment of income or for furnishing inaccurate particulars. Revenue rejected contention of assessee holding that penalty could not be deleted merely because of a technical error in the show cause notice. Held: From perusal of notice, it was very much obvious that AO did not specify the grounds on which penalty was imposed. AO was required to specify that on which limb of section 271(1)(c), the penalty proceedings were initiated, i.e., whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The notice in fact was in standard pro forma without the irrelevant clauses therein being struck off. Thus, penalty was deleted.
Followed:CIT v. Mrs. Piedade Perinchery [ITXA No.1310 of 2014, Order dated 10-1-2017 (Bom.-HC) CIT v. Shri Samson Perinchery (2017) 392 ITR 4 (Bom.) : 2017 TaxPub(DT) 0672 (Bom-HC)
REFERRED :
FAVOUR : In assessee's favour
A.Y. :
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