DY. COMMISSIONER OF INCOME TAX, CIRCLE-16(2), HYDERABAD vs. M/S OPTISERU MUSKAN SERVICE PRIVATE LIMITED, HYDERABAD

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ITA 2117/HYD/2018Status: DisposedITAT Hyderabad12 July 2021AY 2005-062 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271(1)(c) is not sustainable if the show cause notice fails to specify the exact nature of the default. This decision was based on jurisdictional High Court and Bombay High Court judgments.

What were the facts?

The Revenue appealed against an order imposing a penalty under Section 271(1)(c) of the Income Tax Act. The Assessing Officer's show cause notice did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid when the show cause notice does not clearly specify the default (concealment vs. inaccurate particulars).

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, HYDERABAD BENCHES : BENCH “A” HYDERABAD

Before: SHRI S.S. GODARA & SHRI L.P. SAHU

Hearing: 01/06/2021Pronounced: 12/07/2021

Date of Hearing : 01/06/2021 Date of Pronouncement : 12/07/2021 O R D E R PER S.S. GODARA, J.M. This Revenue’s appeal for A.Y. 2005-06 arises against the CIT(A)- 4 Hyderabad’s order dated 17.08.2018 passed in case no. 037/2017-18, involving proceedings u/s 271 (1)(c ) of the Income Tax Act, 1961 [ in short ‘the Act’].

Heard both the parties. Case file perused.

2.

Coming to the revenue’s sole substantive ground challenging correctness of both learned lower authorities’ action imposing sec. 271(1)(c ) penalty of Rs. 99,00,000/- ; we notice that the Assessing officer’s corresponding show

M/s Optiserv Muskan Service Pvt. Ltd. Hyderabad cause notice dated 30th March, 2017 nowhere specified as to whether it is instance of concealment of particulars of taxable income or furnishing of inaccurate particulars of such income; whatsoever.

3.

Learned DR has strongly supported the impugned penalty imposed in both the lower proceedings.

4.

We find no merit in revenue’s instant argument since not only hon’ble jurisdictional high court decision in Pr.CIT vs Baisetty Revathi (2017) 398 ITR 88 (T&AP) holds that such a failure renders sec. 271(1)(c ) penal action as not sustainable in law but hon’ble Bombay high court’s latest full bench judgement in Mohd Farhan A Sheik vs. DCIT (2021) 125 taxman.com 253 (Bom.) has adopted the very line of action. We follow the same mutatis mutandis and delete the impugned penalty.

This Revenue’s appeal is dismissed in above terms. Pronounced in Open Court on 12th July, 2021.

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