Appeal allowed, penalty canceled for vague notice under section 271(1)(c) for assessment year 2011-12.

The Tribunal allowed the appeal, canceling the penalty imposed under section 271(1)(c) for the assessment year 2011-12. The Tribunal held that the penalty notice did not specify the exact nature of the violation, following a legal precedent where such notices were deemed invalid if not specific. As a result, the penalty was found unsustainable, and in favor of the assessee, the penalty was revoked.

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Issues: Challenge to penalty under section 271(1)(c) of the Income Tax Act, 1961 for assessment year 2011-12 due to alleged concealment of income.

Analysis:
1. The appeal was filed against the order of the Ld. CIT(A)-2, Amritsar Camp at Chandigarh for the assessment year 2011-12, contesting the penalty under section 271(1)(c) of the Income Tax Act, 1961. The AO had added an amount to the income of the assessee for not showing interest from a Saving Bank Account in the return of income.

2. The AO initiated penalty proceedings under section 271(1)(c) separately for concealment of income and furnishing inaccurate particulars. The penalty was confirmed by the Ld. CIT(A). However, after considering the arguments, the Tribunal held that the penalty was not leviable in this case.

3. The Tribunal noted that the penalty notice did not specify under which limb of section 271(1)(c) the penalty proceedings had been initiated - whether for concealment of income particulars or furnishing inaccurate particulars. The Tribunal referred to a Karnataka High Court judgment upheld by the Supreme Court, where it was held that such notices are bad in law if they do not specify the exact nature of the violation.

4. Relying on the above legal precedent, the Tribunal found that the penalty notice in this case did not specify the grounds for penalty under section 271(1)(c) clearly. Therefore, the Tribunal concluded that the penalty was not sustainable. The decision was made in favor of the assessee, and the penalty was canceled.

5. Consequently, the Tribunal allowed the appeal of the assessee, setting aside the orders of the lower authorities and canceling the penalty imposed under section 271(1)(c) for the assessment year 2011-12.

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