The Tax Publishers2020 TaxPub(DT) 5324 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Notice issued by AO under section 274 read with section 271(1)(c) did not specify as to under which limb of section 271(1)(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. Accordingly, the notice was defective and penalty levied on the basis of such notice could not be sustained.

Penalty under section 271(1)(c) - Concealment or furnishing of inaccurate particulars - Non-mention of particular charge of offence in penalty notice -

Assessee challenged penalty levied by AO under section 271(1)(c) as regards disallowance of claim of depreciation on flats on the ground of non-mention of particular charge of offence in penalty notice. Second proposition made by assessee was that it claimed depreciation inadvertently as flats were shown in the block of assets in balance sheet. Held: Notice issued by AO under section 274 read with section 271(1)(c) did not specify as to under which limb of section 271(1)(c) penalty proceedings had been initiated, i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. Accordingly, the notice was defective and penalty levied on the basis of such notice could not be sustained. It was true that assessee had claimed depreciation on flats. It was equally true that when returned income of assessee was in crores a claim of paltry sum of few lakhs would do no tax benefit to the assessee. It was definitely a human error and merely the claim was not allowable, same could not lead to levy of penalty under section 271(1)(c).

Relied:CIT v. SSA's Emerald Meadows 9016) 73 Taxman.com 48 (SC) : 2016 TaxPub(DT) 42422 (SC) and Reliance Petro Projects Pvt. Ltd. (2010) 322 ITR 158 (SC) : 2010 TaxPub(DT) 1683 (SC).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2008-09 to 2010-11



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