SHRI. A.S. VAIDYANATHAN,BANGALORE vs. ITO, BANGALORE

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ITA 938/BANG/2014Status: DisposedITAT Bangalore13 April 2016AY 2008-093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal noted that while a vague notice can invalidate a penalty, this specific ground was not raised before the CIT(A). Therefore, the issue was remitted back to the CIT(A) for consideration.

What were the facts?

The assessee appealed against a penalty levied under Section 271(1)(c) of the Income-tax Act, 1961, which was confirmed by the CIT(A). An additional ground was raised regarding the validity of the penalty notice due to vagueness.

What were the issues?

The key issue was whether the penalty notice issued under Section 274 r.w.s. 271 was vague, and if so, whether it invalidated the penalty. The procedural aspect of this issue not being raised before the lower appellate authority was also considered.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, BANGALORE BENCH C, BANGALORE

Before: SHRI. ABRAHAM P. GEORGE & SHRI. GEORGE GEORGE K

For Appellant: Shri. Sham R. Chakravarthy, CA

Heard together (2 matters)

ITA.938/Bang/2016
I.T.A No.938/Bang/2014

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL BANGALORE BENCH 'C', BANGALORE BEFORE SHRI. ABRAHAM P. GEORGE, ACCOUNTANT MEMBER AND SHRI. GEORGE GEORGE K, JUDICIAL MEMBER (Assessment Year : 2008-09) Shri. A. S. Vaidyanathan, No.4084, Prestige Southridge, Hoskerehalli Cross, BSK III Stage, Bangalore 560 085 .. Appellant PAN : AHPPA3615M v. Income-tax Officer, Ward – 5(3), Bengaluru .. Respondent Assessee by : Shri. Sham R. Chakravarthy, CA Revenue by : Shri. Sunil Kumar Agarwala, JCIT Heard on : 11.04.2016 Pronounced on : 13.04.2016 O R D E R PER ABRAHAM P. GEORGE, ACCOUNTANT MEMBER : Assessee through this appeal assails levy of penalty u/s.271(1)(c) of the Income-tax Act, 1961 (‘the Act’ in short), for the impugned assessment year, which was confirmed by the CIT(A) –II, Bengaluru.

ITA.938/Bang/2016 Page - 2

2.

In addition to the original grounds, assessee has also taken one additional ground of appeal which reads as under :

“The order of penalty passed under section 271(1)(c) of the Act is bad in law as the notice issued under section 274 rws 271 is not discernable whether the penalty proceedings is initiated for concealment or for furnishing of inaccurate particulars under the facts and circumstances of the case.”

3.

Learned Counsel for the Assessee submitted that by virtue of the judgment of Hon’ble jurisdictional High Court in the case of CIT v. M/s. Manjunatha Cotton & Ginning Factory (359 ITR 565), a vague notice would invalidate the levy of penalty.

4.

Ld. DR on the other hand submitted that this ground was taken by the assessee before the CIT (A).

5.

We have perused the orders and heard the contentions. It might be true that Hon’ble jurisdictional High Court in the case of Manjunatha Cotton & Ginning Factory (supra) had emphasised the requirement of specifying the alleged failure of the assessee in the notice issued u/s.274 read with section 271(1)(c) of the Act. Nevertheless we also find that such a ground was never raised before the CIT (A). In the fitness of things, we are of the opinion that the issue regarding validity of penalty due to vagueness of the notice issued u/s.274 r.w.s.271 of the Act has to be ITA.938/Bang/2016 Page - 3 considered by the CIT (A). We therefore remit this issue to the CIT (A) for consideration in accordance with law.

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