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of <h1>Penalty u/s 271(1)(c) quashed as vague notice failed to specify concealment or inaccurate particulars charge</h1> ITAT, Delhi held that the penalty notice issued u/s 271(1)(c) was invalid due to non-specification of the exact charge. The AO issued the notice in an ... Validity of penalty notice issued u/s. 271(1)(c) - non specification of clear charge - as argued notice is issued in a mechanical manner without proper application of mind - HELD THAT:- A bare perusal of notice would show that the same has been issued in an omnibus manner. The irrelevant charge for levy of penalty u/s. 271(1)(c) of the Act has not been struck of by the AO. The notice mentions both charges of section 271(1)(c) of the Act i.e. “concealed the particulars of income” and “furnish inaccurate particulars of income” with conjunction “or”. This makes the notice ambiguous. It is a well settled legal proposition that where there is ambiguity in mentioning of charge in the notice, the notice becomes defective. (RE: Mohd. Farhan A. Shaikh vs. 2021 (3) TMI 608 - BOMBAY HIGH COURT (LB)) Any proceedings arises from defective notice are vitiated. Assessee appeal allowed. The assessee's appeal concerned only the validity of the penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961, for AY 2015-16. The challenge was to the penalty notice issued under section 274 r.w.s. 271(1)(c), on the ground that it did not clearly specify the precise charge-whether for 'concealed the particulars of income' or for 'furnish inaccurate particulars of income.' The Tribunal noted that the notice was issued in an omnibus and mechanical manner, retaining both alternative charges connected by 'or' without striking off the irrelevant portion. Relying on the Full Bench decision of the Bombay High Court in Mohd. Farhan A. Shaikh v. DCIT, 125 taxmann.com 253, it held that such ambiguity renders the notice defective and vitiates the penalty proceedings. Finding merit in ground no. 5, the Tribunal set aside the impugned order and allowed the assessee's appeal.
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