V.SRIDHAR,CHENNAI vs. ACIT, CHENNAI

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

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

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)

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.

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

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