Assessee's penalty quashed for lack of notice specificity.

The Tribunal allowed the appeal of the assessee, quashing the penalty imposed under Section 271(1)(c) of the Income-tax Act, 1961. The penalty was invalidated due to the Assessing Officer's failure to specify the exact nature of the default in the Show Cause Notice, violating the statutory mandate of Section 274(1) of the Act. Other grounds of appeal were not adjudicated as the penalty was quashed on jurisdictional grounds.

---

---

Issues Involved:
1. Validity of Penalty Proceedings Initiated under Section 271(1)(c) of the Income-tax Act, 1961.
2. Ex-parte Decision by the CIT (Appeals) without Considering Submissions.
3. Confirmation of Penalty by CIT (Appeals).
4. General Grounds of Appeal.

Summary:

1. Validity of Penalty Proceedings Initiated under Section 271(1)(c) of the Income-tax Act, 1961:
The assessee contended that the Assessing Officer (A.O.) failed to specify the exact nature of the default in the "Show Cause Notice" (SCN) issued under Section 274 read with Section 271(1)(c) of the Act, dated 31.12.2017. The SCN mentioned both "concealment of income" and "furnishing inaccurate particulars of income" using "OR" as a conjunction, which did not clearly convey the specific default to the assessee. The Tribunal observed that the A.O. did not validly put the assessee on notice regarding the specific default, thereby violating the mandate of Section 274(1) of the Act. Citing judicial precedents, the Tribunal held that non-specification of the exact charge in the SCN reflects non-application of mind by the A.O. and invalidates the penalty proceedings. Consequently, the penalty of Rs. 54,108/- imposed under Section 271(1)(c) was quashed.

2. Ex-parte Decision by the CIT (Appeals) without Considering Submissions:
The assessee argued that the CIT (Appeals) erred in deciding the appeal ex-parte without considering the submissions made on 27.12.2022. However, as the penalty was quashed on the primary ground of invalid assumption of jurisdiction, this issue was not further adjudicated.

3. Confirmation of Penalty by CIT (Appeals):
The CIT (Appeals) had confirmed the penalty of Rs. 54,108/- imposed by the A.O. under Section 271(1)(c). The Tribunal, however, set aside this confirmation due to the invalidity of the SCN, as discussed in the first issue.

4. General Grounds of Appeal:
Grounds of appeal Nos. 4 & 5, being general in nature, were dismissed as not pressed.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the penalty imposed under Section 271(1)(c) due to the A.O.'s failure to specify the exact nature of the default in the SCN, thus violating the statutory mandate. Other grounds of appeal were not adjudicated as the penalty was quashed on jurisdictional grounds.

---