Tribunal revokes penalty citing vague notice, emphasizes clarity in penalties. Assessee's appeal allowed.

The Tribunal set aside the penalty imposed on the assessee under section 271(1)(c) of the Income Tax Act, 1961, due to the vague charge in the notice and penalty order, which failed to specify the exact grounds for the penalty. The Tribunal emphasized the importance of clarity in charging penalties and noted that the assessee had filed a revised return before the completion of assessment, disclosing the previously omitted income components. As a result, the appeal was allowed, and the penalty was revoked on 26th March 2019.

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Issues:
Confirmation of penalty u/s.271(1)(c) of the Income Tax Act, 1961.

Analysis:
The appeal pertains to the confirmation of penalty under section 271(1)(c) of the Income Tax Act, 1961. The assessee, a salaried individual, had income from various sources. The penalty was initiated due to the failure of the assessee to disclose specific amounts of salary received, interest income, and source of cash deposits. The assessee contended that the notice and penalty order were vague regarding the specific charge under which the penalty was imposed. Citing legal precedents, the assessee argued that if the charge is not specific, penalty under section 271(1)(c) cannot be levied. The assessee also highlighted that a revised return was filed before the completion of assessment, disclosing the previously omitted income components, thus asserting compliance with the law.

The Tribunal examined the case records and legal precedents cited. It noted that the charge for the penalty was not specific in the notice and penalty order, mentioning both limbs of 'concealment of income' and 'furnishing inaccurate particulars of income.' Referring to judicial decisions, the Tribunal emphasized the importance of clarity in specifying the charge for imposing penalties. It held that the assessee should be aware of the exact charge to prepare a defense effectively. In this case, due to the vague charge, the levy of penalty was deemed unwarranted. Additionally, the Tribunal acknowledged the revised return filed by the assessee, which aligned with the statutory requirements of disclosing income particulars under section 139(5) of the Act.

Considering the facts and legal principles, the Tribunal set aside the order of the Ld. CIT(Appeals) and directed the Assessing Officer to delete the penalty imposed on the assessee. Consequently, the appeal of the assessee was allowed, and the penalty was revoked. The judgment was pronounced on 26th March 2019.

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