Penalty order quashed for not specifying exact section, leading to successful appeal. The Tribunal quashed the penalty order under section 271(1)(c) for Assessment Year 2012-13 due to the penalty notice not specifying the exact limb of ...
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Penalty order quashed for not specifying exact section, leading to successful appeal.
The Tribunal quashed the penalty order under section 271(1)(c) for Assessment Year 2012-13 due to the penalty notice not specifying the exact limb of Section 271(1)(c) as required by law. Following the precedent set by the Hon'ble Bombay High Court (Full Bench at Goa), the penalty proceedings were deemed bad in law, leading to the allowance of the assessee's appeal. Other grounds raised were not addressed as the penalty order was already quashed.
Issues involved: The appeal against the order of the ld. Commissioner of Income Tax (Appeals) for assessment year 2012-13 regarding the penalty imposed under section 271(1)(c) on the disallowance of Rs. 5,26,469.
Details of Judgment:
Issue 1: Penalty proceedings initiated without specifying the exact limb of Section 271(1)(c) of the Act.
The Ld. Counsel argued that the penalty notice was issued without specifying the charge for which it was issued, making the penalty proceedings bad in law. Referring to relevant judgments, it was emphasized that the notice must clearly indicate the limb under which penalty is imposed. The Assessing Officer did not strike off the irrelevant limb in the notice, leading to ambiguity in the charge.
Issue 2: Impact of the Hon'ble Bombay High Court (Full Bench at Goa) judgment.
The Hon'ble Bombay High Court (Full Bench at Goa) held that an omnibus notice, without specifying the grounds of penalty proceedings, is vague and violates natural justice. The Court emphasized that the notice must inform the assessee of the exact charge for which penalty is initiated to ensure fairness and clarity in the proceedings.
Conclusion:
The Tribunal, following the precedent set by the Hon'ble Bombay High Court (Full Bench at Goa), quashed the penalty order under section 271(1)(c) for Assessment Year 2008-09. The penalty proceedings were deemed bad in law due to the failure to specify the relevant limb for which the penalty was imposed. As a result, the appeal of the assessee was allowed, and the other grounds raised were not addressed as the penalty order was already quashed.
Order pronounced on 11/04/2023.
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