Appeal allowed as penalty lacked specificity. Tribunal refrains from addressing merits.

The Tribunal allowed the appeal, holding that the penalty imposed under Section 271(1)(c) of the Income Tax Act should be deleted due to the failure to specify the specific charge of the offense committed by the assessee. The Tribunal refrained from addressing the merits of the penalty levy and left open the grounds raised by the assessee regarding the validity of the penalty on merits. The decision was rendered on 22/03/2019.

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Issues Involved:
1. Justification of penalty imposition under Section 271(1)(c) of the Income Tax Act, 1961.
2. Specificity of the charge of offense in the penalty show-cause notice.
3. Validity of the penalty proceedings based on the assessment order and show-cause notice.

Detailed Analysis:

1. Justification of Penalty Imposition under Section 271(1)(c):
The primary issue in this appeal was whether the Commissioner of Income Tax (Appeals) [CIT(A)] was justified in confirming the levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961, amounting to Rs. 16,54,500/-. The penalty was imposed on the grounds of concealment and furnishing inaccurate particulars of income. The assessee argued that the penalty was unjustified as no specific charge was mentioned in the show-cause notice, and the Assessing Officer (AO) did not record proper satisfaction in the assessment order.

2. Specificity of the Charge of Offense:
The assessee contended that the penalty show-cause notice issued under Section 271(1)(c) read with Section 274 of the Act did not specify the specific charge of offense, i.e., whether the assessee had concealed particulars of income or furnished inaccurate particulars of income. The AO used the word "or" in the notice, which created ambiguity. The Tribunal found that the AO did not strike off inapplicable words in the show-cause notice, leading to a lack of clarity regarding the specific charge. The Tribunal referenced the decision in CIT vs. Shri Samson Perinchery, where it was held that the AO must be clear about the specific charge when initiating penalty proceedings.

3. Validity of Penalty Proceedings Based on the Assessment Order and Show-Cause Notice:
The Tribunal noted that the AO mentioned different charges at various stages, including the assessment order, penalty order, and show-cause notice. This inconsistency indicated a lack of clarity and non-application of mind. The Tribunal relied on the decision of the Hon'ble Supreme Court in NTPC Ltd., which allowed raising a question of law for the first time if it did not involve fresh investigation of facts. The Tribunal concluded that the AO's failure to specify the offense committed by the assessee rendered the penalty proceedings invalid.

Conclusion:
The Tribunal held that the penalty levied by the AO deserved to be deleted on the technical ground of not specifying the specific charge of the offense committed by the assessee. Consequently, the appeal of the assessee was allowed, and the Tribunal refrained from giving an opinion on the merits of the penalty levy. The grounds raised by the assessee regarding the validity of the penalty on merits were left open, and no decision was rendered on those grounds. The order was pronounced in the open court on 22/03/2019.

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