Penalty for concealment can not be imposed when notice issued was for furnishing inaccurate particulars of income – ITAT
ABCAUS Case Law Citation:
ABCAUS 2409 (2018) 07 ITAT
The instant appeal was filed by the assessee against the order of the CIT(A) against the confirmation of penalty levied u/s 271(1)(c) of the Income-tax Act, 1961 (the Act).
The Tribunal observed that a perusal of the notice issued showed that the Assessing Officer (AO) had stricken off the charge – “have concealed the particulars of income” and had not stricken off the charge – “furnishing inaccurate particulars of income”.
However, there were several other faults like various clauses in the notice related to (i) failure to comply with the notices u/s. 142(1)/143(2) of the Act, (ii) failure to furnish return of income given under notice u/s. 139(2)/148 had not been stricken off. Therefore, the Tribunal opined that as per the order of the Hon’ble Karnataka High Court the penalty notice itself suffered from infirmity of not giving specific charge.
The tribunal opined that even if it was assumed that the assessee had taken note that the notice was issued only for penalty related to “furnishing inaccurate particulars of such income” still, the AO while levying penalty had recorded the finding that assessee must be deemed to have concealed particulars of income within the meaning of explanation 5A to sec. 271(1)(c).
Thus, though the penalty notice was issued against the assessee for furnishing inaccurate particulars of income the AO had held the assessee to be at fault for concealing the particulars of his income which was illegal as held by the Hon’ble Bombay High Court wherein aggrieved by the order of the Tribunal on similar issue, the Department argued that there was no difference between furnishing of inaccurate particulars of income and concealment of income and the distinction drawn by the Tribunal was between Tweedledum and Tweedledee. However their Lordships relying on the judgment of the Karnataka High Court declined to take a different view.
It was also noted that Explanation 5A to sec. 271(1)(c) of the Act was not applicable because the said Explanation 5A was applicable only in case of an assessee where search had been initiated u/s. 132 of the Act on or after 1st day of June, 2007 where the assessee is found to be the owner of money, bullion etc. In this case, the assessee was not searched u/s. 132 of the Act.
The ITAT opined that the penalty notice and the penalty order suffered from legal infirmities and cannot be sustained in the eyes of law. Accordingly the Tribunal cancelled the penalty order
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