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Income Tax Appellate Tribunal, ‘B’ BENCH: CHENNAI
Before: SHRI N.R.S. GANESAN & SHRI D.S.SUNDER SINGH
आदेश / O R D E R PER D.S.SUNDER SINGH, ACCOUNTANT MEMBER:
This is an appeal filed by the assessee against the Order dated 17.12.2015 of Commissioner of Income Tax (Appeals)-3, Coimbatore, in for the AY 2011-12.
2.0 All the grounds of the appeal are related to the levy of penalty u/s.271(1)(c) of Income Tax Act (in short ‘the Act’). The assessee filed
ITA No.684/Mds/2016 :- 2 -: return of income declaring total income of Rs.24,21,827/- and the assessment was completed u/s.143(3) on total income of Rs.72,62,327/-.
The Assessing Officer (in short ‘AO’) initiated penalty u/s.271(1)(c).
Subsequently, the AO levied a penalty of Rs.14,95,097/- u/s.271(1)(c).
The assessee went on appeal before the Learned Commissioner of Income Tax (Appeals) (hereinafter referred to as ‘Ld.CIT(A)’) and the Ld.CIT(A) confirmed the penalty.
3.0 Aggrieved by the order of the Ld.CIT(A), the assessee filed an appeal before us.
Appearing for the assessee, the Learned Authorized Representative (hereinafter referred to as ‘Ld.AR’) argued that the AO is not clear whether penalty is initiated for furnishing of inaccurate particulars or for concealment of income. The AO has not struck the irrelevant column in the notice issued u/s.271(1)(c) giving scope for ambiguity to explain whether the assessee has to explain for concealment of income or for furnishing of inaccurate particulars. According to the Ld.Counsel, the penalty imposed by the AO required to be cancelled. The Ld.A.R placed reliance on the decision of the Hon’ble Karnataka High Court in the case of CIT v. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 and also in the case of the Hon’ble Supreme Court Dilip N.Shroff [2007] 291 ITR 519 (SC).On the other hand the the Ld.D.R relied on the order of the AO.
ITA No.684/Mds/2016 :- 3 -:
4.0 We heard the rival submissions and perused the material placed before us.
We have gone through the Assessment Order, Penalty Order and the notice issued u/s.271(1)(c). The AO has not mentioned anywhere either in the Assessment Order or in the Penalty Order, whether the penalty has been initiated for concealment of income or for furnishing of inaccurate particulars. In the Penalty Order also, the AO has not made up his mind whether the penalty was imposed for furnishing of inaccurate particulars or for concealment of income. The AO issued the notice u/s.271(1)(c) and has not struck of the irrelevant column relating to furnishing of inaccurate particulars or concealment of income. In the decisions relied upon by the assessee i.e CIT v. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 and also in the case of the Hon’ble Supreme Court in Dilip N.Shroff [2007] 291 ITR 519 (SC) held that non-striking of the irrelevant column in the notice issued u/s.274 r.w.s.271(1)(c) make the notice invalid and consequent penalty required to be cancelled. The Hon’ble Supreme Court dismissed the Special Leave Petition filed by the Revenue on the same issue. The Revenue has not controverted the decisions relied up on by the assessee.
Respectfully following the legal precedents cited supra, we hold that notice issued u/s.271(1)(c) without putting the assessee on notice for which reason the penalty is initiated is bad in law and consequent penalty
ITA No.684/Mds/2016 :- 4 -: levied u/s.271(1)(c) cannot be sustained. Accordingly, we annul the order passed u/s.271(1)(c) and the appeal of the assessee is allowed.
5.0 In the result, the appeal of the assessee is allowed.