Penalty SCN not striking off relevant limb upheld when later notices not challenged

Validity of Penalty notice non striking off relevant limb u/s 271(1)(c) upheld when subsequent opportunity notices sent by AO were not challenged

ABCAUS Case Law Citation:
ABCAUS 2731 (2019) (01) ITAT

The assessee had filed the instant appeal against the order passed by the CIT(A) upholding the penalty imposed by the Assessing Officer (AO) under Section 271(1)(c) of the Income Tax Act, 1961 (the Act).

One of the ground taken by the assessee was that the CIT(A) ignored the fact that the AO initiated penalty u/s 271(1)(C) of the Act on account of furnishing of inaccurate particulars of income whereas he had imposed penalty on account of concealment of income.

The assessee also filed an application for admission of the following additional grounds of appeal that the notice issued u/s 274 r.w.s. 271 was not specific that on which limb of section 271(1)(c) penalty was initiated.

The assessee contended that the AO had failed to delete the irrelevant default clause in the body of the ‘Show cause’ notice (‘SCN’), therefore, he had wrongly assumed jurisdiction and imposed penalty in the hands of the assessee.

In respect of his aforesaid contention, it was submitted that the default for which the assessee was put to notice and therein called upon explain as to why penalty under Sec. 271(1)(c) may not be imposed on him was not discernible from a perusal of the ‘SCN’.

However, the Tribunal observed that the AO, prior to imposing of penalty under Section 271(1)(c), subsequent to the said SCN, had also issued two opportunity notices. However, the assessee, on being confronted with the said fact, failed to assail the validity of the said notices.

The Tribunal opined that the validity of the jurisdiction assumed by the AO for imposing penalty u/s 271(1)(c) would also require a perusal of the said opportunity notices, the validity of which had not been assailed.

Accordingly, the additional grounds of appeal raised by the assessee was dismissed.

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