SUBASH AGARWAL,BHUBANESWAR vs. ACIT, CIRCLE-2(1), BHUBANESWAR

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ITA 259/CTK/2018Status: DisposedITAT Cuttack19 December 2019AY 2010-118 pages
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What did the Tribunal hold?

The Tribunal held that the penalty notice issued by the AO was defective as it was in a stereotyped format without specifying the exact limb of Section 271(1)(c) under which penalty was being levied. This indicated a non-application of mind by the AO.

What were the facts?

The assessees' appeals were filed with a delay of 303 days. The Assessing Officer (AO) initiated penalty proceedings under Section 271(1)(c) by issuing a notice under Section 274 that 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 notice issued under Section 274 does not clearly specify the ground for levying the penalty (concealment of income or furnishing inaccurate particulars).

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI C.M. GARG, JM & SHRI L.P. SAHU, AM

For Respondent: Shri Subhendu Dutta, DR
Hearing: 27/11/2019Pronounced: 19/12/2019

Heard together (4 matters)

ITA Nos.259/CTK/2018
ITA Nos.260/CTK/2018
ITA Nos.261/CTK/2018
ITA Nos.262/CTK/2018

Read from the judgment's own cause title. This page is filed under one of them.

per Hon'ble High Court, where the Assessing Officer proposed to

7 ITA Nos.259-262/CTK/2018 invoke first limb being concealment, then the notice has to be

appropriately marked. The Hon'ble High Court held that the standard

proforma of notice under section 274 of the Act without striking of the

irrelevant clauses would lead to an inference of non-application of

mind by the Assessing Officer. The Hon'ble Supreme Court in the case

of Dilip N. Shroff vs. JCIT, 291 ITR 519(SC) has also noticed that where

the Assessing Officer issues notice under section 274 of the Act in the

standard proforma and the inappropriate words are not deleted, the

same would postulate that the Assessing Officer was not sure as to

whether he was to proceed on the basis that the assessee had

concealed the particulars of his income or furnished inaccurate

particulars of income. According to the Hon'ble Supreme Court, in such

a situation, levy of penalty suffers from non- application of mind. In the

background of the aforesaid legal position and, having regard to the

manner in which the Assessing Officer has issued notice under section

274 r.w.s. 271(1)(c) of the Act dated 31.03.2013 without striking off

the irrelevant words, the penalty proceedings show a non-application

of mind by the Assessing Officer and is, thus, unsustainable.

9.

The facts of the present appeals are identical to the facts of the

case before the Hon'ble Supreme Court in the case of SSA's. Emarld

Meadows(supra) and, therefore, the decision of Hon'ble Supreme Court

squarely applies to the case of the assessee. Hence, respectfully

8 ITA Nos.259-262/CTK/2018 following the same, we set aside the impugned order passed by the CIT(A) in case of all the assessees in their respective appeals and cancel the order of the Assessing Officer dated 11.09.2013 levying penalty u/s.271(1)(c) of the Act and allow the sole ground of appeal raised by all the assessees in their respective appeals under consideration. 10. In the result, appeals of all the assessees are allowed. Order pronounced in the open court on 19/12/ 2019. Sd/- Sd/- (C.M.GARG) (L.P.SAHU) न्यानयक सदस्य / JUDICIAL MEMBER ऱेखा सदस्य / ACCOUNTANT MEMBER कटक Cuttack; ददनांक Dated 19/12/2019 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनिलऱपप अग्रेपषि/Copy of the Order forwarded to : अऩीलाथी / The Appellant- 1.

प्रत्यथी / The Respondent- 2. आयकि आयुक्त(अऩील) / The CIT(A), 3. आयकि आयुक्त / CIT 4. ववभागीय प्रनतननधध, आयकि अऩीलीय अधधकिण, कटक / DR, ITAT, 5. Cuttack गार्ा पाईल / Guard file. 6. सत्यावऩत प्रनत //True Copy// आदेशािुसार/ BY ORDER,

(Senior Private Secretary) आयकर अपीऱीय अधिकरण, कटक / ITAT, Cuttack

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