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of <h1>Penalty Cancelled Due to Lack of Clarity in Notice</h1> <h3>Sri Rajendra Kumar Kar Versus ACIT, Circle 5 (1), Bhubaneswar</h3> Sri Rajendra Kumar Kar Versus ACIT, Circle 5 (1), Bhubaneswar - TMI Issues involved:1. Condonation of delay in filing appeal.2. Levy of penalty u/s.271(1)(c) - concealment of income or furnishing inaccurate particulars.Condonation of delay in filing appeal:The appeal was filed 29 days late, and the assessee submitted a condonation petition with an affidavit. The tribunal found a reasonable cause for the delay and admitted the appeal for hearing.Levy of penalty u/s.271(1)(c) - concealment of income or furnishing inaccurate particulars:The primary issue was whether the penalty of Rs.66,172/- imposed by the Assessing Officer under section 271(1)(c) was justified. The notice issued by the Assessing Officer did not specify if the penalty was for concealment of income or furnishing inaccurate particulars. The Supreme Court precedent highlighted that failure to specify the nature of penalty proceedings in the notice renders the penalty order liable for cancellation. The Tribunal noted that the penalty notice lacked clarity, which was crucial for the assessee to respond adequately. The Assessing Officer's failure to specify the relevant limb of section 271(1)(c) in the notice indicated a lack of application of mind and rendered the penalty unsustainable.The Tribunal referred to the decision in a similar case before the Supreme Court and concluded that the facts were identical, leading to the cancellation of the penalty imposed by the Assessing Officer. Citing legal precedents, including the Karnataka High Court and the Supreme Court, the Tribunal emphasized the importance of clarity in penalty notices under section 271(1)(c) and the need for Assessing Officers to specify the relevant limb for effective communication with the assessee. Consequently, the Tribunal allowed the appeal filed by the assessee, canceling the penalty of Rs.66,172/- imposed by the Assessing Officer.In conclusion, the Tribunal allowed the appeal filed by the assessee, emphasizing the necessity of clarity in penalty notices under section 271(1)(c) and the requirement for Assessing Officers to specify the relevant limb for effective communication with the assessee. The penalty imposed by the Assessing Officer was canceled based on the lack of clarity in the notice issued, following legal precedents and principles outlined by the Supreme Court and High Courts.
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