ASHOK M. MUSALE,PUNE vs. DEPUTY COMMISSIONER OF INCOME-TAX, CIRCLE - 8, PUNE

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ITA 705/PUN/2018Status: DisposedITAT Pune30 June 2022AY 2005-063 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the Assessing Officer's penalty show cause notice failed to specify whether the assessee concealed income or furnished inaccurate particulars. Citing a jurisdictional High Court decision, the Tribunal found this defect fatal to the penalty proceedings.

What were the facts?

The assessee's appeal for AY 2005-06 concerned a penalty levied under Section 271(1)(c) of the Income Tax Act, 1961, related to a deemed dividend addition. The assessee did not appear for the hearing.

What were the issues?

The key issue was the validity of the penalty proceedings due to the vagueness in the Assessing Officer's show cause notice regarding the nature of the alleged concealment or inaccuracy.

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

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Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE

Before: SHRI S.S. GODARA & DR. DIPAK P. RIPOTE

For Respondent: Shri S.P. Walimbe

Assessee by None Revenue by Shri S.P. Walimbe Date of hearing 27-06-2022 Date of pronouncement 30-06-2022 आदेश / ORDER

PER S.S. GODARA, JM :

1.

This assessee‟s appeal for AY 2005-06 arises against the CIT(A)-6, Pune‟s order dated 15-02-2018 passed in case No. PN/CIT(A)-V/DCIT, Cir.8/192/2015-16 involving proceedings under Section 271(1)(c) of the Income Tax Act, 1961, in short „the Act‟.

Case called twice. None appears at the assessee‟s behest. He is accordingly proceeded ex-parte.

2.

Coming to the assessee‟s sole substantive grievance that both the learned lower authorities have erred in law and on facts in levying impugned section 271(1)(c) penalty amounting to Rs.22,13,376/- pertaining to deemed dividend addition made in quantum proceedings, Mr. Walimbe vehemently 2 Ashok M. Musale supported the same by pleading that this taxpayer had failed to offer any justifiable explanation. He also quoted case law Mak Data Pvt. Ltd. vs. CIT (2013) 358 ITR 593 (SC) that such a penalty is indeed attracted on account of assessee‟s failure in filing a cogent explanation.

3.

We have given our thoughtful consideration to the foregoing arguments and find no merit therein. A perusal of Assessing Officer‟s corresponding penalty show cause notice dated 28.09.2012 suggests that he had nowhere specified as to whether this taxpayer had concealed particulars of his income or furnished inaccurate particulars of such income. That being the case, we quote the hon‟ble jurisdictional high court‟s recent landmark decision in Mohd. Farhan A. Shaikh vs. ACIT (2021) 434 ITR 1 (Bom) (FB) holding that such a failure on Assessing Officer‟s part is indeed fatal to initiation of 271(1)(c) penal provision itself. We accordingly delete the impugned penalty for this precise reason alone.

All other grounds on merits stand rendered academic.

4.

This assessee‟s appeal is allowed in above terms.

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