V.SRIDHAR,CHENNAI vs. ACIT, CHENNAI

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ITA 416/CHNY/2017Status: DisposedITAT Chennai10 January 2018AY 2010-20113 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 penalty notice was bad in law because it did not clearly state the reason for initiating penalty proceedings. Consequently, the penalty levied was unsustainable and cancelled.

What were the facts?

The assessee appealed against a penalty order. The penalty notice issued under Section 274 read with Section 271 did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. The assessee argued this made the notice invalid.

What were the issues?

The primary issue was the validity of the penalty notice issued under Section 274 r.w.s. 271(1)(c) when it failed to strike down the irrelevant column, making it ambiguous.

Which sections of the Income-tax Act were involved?

Section 274,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, ‘C’ BENCH: CHENNAI

Before: SHRI ABRAHAM P.GEORGE & SHRI GEORGE MATHAN

Hearing: 10.01.2018Pronounced: 10.01.2018

आदेश / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER:

1.

Order of the Commissioner of Income Tax (Appeals)-15, Chennai, in dated 20.12.2016 for the AY 2010-11.

2.

Shri N.Madhavan, ACIT, represented on behalf of the Revenue and Shri N.Devanathan, Adv. represented on behalf of the assessee.

ITA No.416/Mds/2017 :- 2 -:

3.

At the time of hearing, the Ld.AR drew our attention to the penalty notice issued u/s.274 r.w.s.271 at Page No.15 of the Paper Book. It was a submission that in the notice the AO has not struck down as to whether penalty is being levied for the concealment of the particulars of the income or for furnishing of inaccurate particulars of the income. It was a submission that in view of the decision of the Hon’ble Supreme Court in the case of Manjunatha Cotton and Ginning Factory reported in (2013)

359 ITR 565 and in the case of Dilip N.Shroff reported in [2007] 291 ITR 519 (SC) on account of the non-striking of the irrelevant column in the notice issued u/s.274 r.w.s. 271(1)(c) makes the notice invalid and consequently, the penalty was liable to be cancelled. It was also a submission that the SLP filed by the Revenue on the same issue before the Hon’ble Supreme Court has also been dismissed.

4.

In reply, the Ld.DR vehemently supported the order of the AO and the Ld.CIT(A). However, the Ld.DR was unable to controvert the decision relied upon by the assessee before us.

5.

We have considered the rival submissions. Respectfully following the legal precedents cited supra, as it is noticed that the assessee has not been put on notice for which reason the penalty is being initiated, the notice u/s.274 r.w.s.271 dated NIL in the case of the assessee for the AY 2010-11 is held to be bad in law and consequently, the penalty levied u/s.271(1)(c) of the Act on the basis of such notice being unsustainable

ITA No.416/Mds/2017 :- 3 -: stands cancelled. The penalty as levied by the AO and as confirmed by the Ld.CIT(A) stands cancelled. As we have decided the issue on technicality of the validity of the notice, we are not going into the merits of the levy of penalty.

6.

In the result, the appeal filed by the assessee stands allowed.

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