Penalty under Income Tax Act for A.Y. 2013-14 deemed unsustainable due to lack of specificity in show-cause notice.

The Tribunal allowed the assessee's appeal against the penalty imposed under section 271(1)(c) of the Income Tax Act for A.Y. 2013-14. The Tribunal held that the penalty was not sustainable due to the lack of specificity in the show-cause notice, which failed to specify the charges for which an explanation was required. As a result, the penalty of Rs.77,65,050/- imposed on the assessee was deemed not sustainable and was deleted.

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Issues involved: Appeal against penalty imposed u/s 271(1)(c) of the Income Tax Act for A.Y. 2013-14.

Summary:

Issue 1: Lack of specificity in show-cause notice

The assessee appealed against the penalty imposed under section 271(1)(c) of the Income Tax Act, contending that the Assessing Officer did not specify the charges in the show-cause notice. The Counsel for the assessee argued that the lack of specific charges in the notice made it debatable whether the penalty could be imposed. The Tribunal noted that the Assessing Officer is required to specify the charge for which an explanation is required from the assessee, whether for concealment of income or furnishing inaccurate particulars. Referring to relevant judgments, the Tribunal held that in the absence of specific charges in the show-cause notice, the penalty would not be sustainable. Consequently, the penalty of Rs.77,65,050/- imposed on the assessee was deemed not sustainable and was deleted.

Decision:

The Tribunal, after considering the arguments presented by both parties and examining the relevant show-cause notice, concluded that the penalty imposed on the assessee was not sustainable due to the lack of specificity in the notice. Therefore, the appeal of the assessee was allowed, and the penalty of Rs.77,65,050/- was deleted.

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