TIRMULA SURYA KUMARI,SRIKAKULAM vs. INCOME TAX OFFICER, WARD-1, SRIKAKULAM

Facts

The assessee appealed against a penalty levied under section 271(1)(c) of the Income Tax Act. The primary contention was that the penalty notice was ambiguous, failing to specify whether the penalty was for concealment of income or filing inaccurate particulars. Additionally, it was noted that the assessment order upon which the penalty was based had been set aside by the ITAT in a prior appeal.

Held

The Tribunal held that since the assessment order itself was set aside, the additions made therein would not survive, and consequently, the penalty levied on those additions would also not survive. The Tribunal also found merit in the argument that the penalty notice lacked clarity by not specifying the exact limb under section 271(1)(c) under which the penalty was proposed.