LATE SRI ZIA USMANI THROUGH L/H AND WIFE SMT. MEHVISH USMANI,ALLAHABAD vs. COMMISSIONER OF INCOME TAX (APPEALS), ALLAHABAD

ITA 143/ALLD/2019Status: DisposedITAT Allahabad12 April 2021AY 2008-0912 pages
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What did the Tribunal hold?

The Tribunal held that the initiation of penalty proceedings was invalid because the Assessing Officer did not specify the exact charge (concealment or inaccurate particulars) in the show cause notice. Furthermore, levying penalty on both grounds without a clear finding renders the order unsustainable.

What were the facts?

The assessee expired before the assessment proceedings were completed. The Assessing Officer initiated penalty proceedings under Section 271(1)(c) after the assessee's death, making additions for unexplained bank deposits. The penalty notice was vague, and the final penalty order charged the assessee with both concealment and furnishing inaccurate particulars of income.

What were the issues?

Whether penalty proceedings under Section 271(1)(c) are valid if the Assessing Officer fails to specify the exact charge in the show cause notice and levies penalty on multiple grounds without clear findings.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

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Income Tax Appellate Tribunal, ALLAHABAD BENCH ‘SMC’ ALLAHABAD

Before: SHRI VIJAY PAL RAO

For Appellant: Shri Ashish Bansal, Adv
For Respondent: Shri A.K. Singh, Sr. D.R
Hearing: 06/04/2021Pronounced: 12/04/2021

The appeal filed by the assessee is directed against the order dated 07.08.2019 and CIT(A) arising from penalty order passed u/s 271(1)(c) of the Income Tax for assessment year 2008-09. 2. The assessee has raised the following grounds:

1.

Because the Assessing Officer initiated the penalty u/s 271(1)(c)after death of the assessee on 28.04.2010 in the assessment order dated 31.12.2010. 2. Because the Assessing Officer initiated the penalty u/s 271(1)(c) without recording the satisfaction whether the penalty envisaged to be levied was for furnishing inaccurate particulars of income or for concealing particulars o

The order continues below.

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