2026 (3) TMI 375

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....e Income Tax Act, 1961 ('the Act' in short) against the order passed u/s 271(1)(c) dated 29.03.2017 for Assessment Year 2011-12. 2. Brief facts of the case are that assessee filed return of income on 16.08.2011 declaring total income of Rs. 9,29,17,880/-. The case was selected for scrutiny and the assessment was completed at an income of Rs. 9,73,61,297/- vide order dated 19.03.2014 passed u/s 143(3) of the Act. Against the said order, assessee filed an appeal before the Ld. CIT(A) who vide its order dated 21.09.2015 in Appeal No. 253/2014-15 partly allowed the appeal filed by assessee, and confirmed the additions to the extent of Rs. 34,62,090/-. Thereafter, the Assessing Officer proceeded with the pending penalty proceedings initiated ....

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....nsidering the facts and circumstances of the case and the legal position. 2. That the order dated 19.09.2025 levying penalty u/s 271(1)(c) of the Income-tax Act, 1961 passed by the Additional/ Joint Commissioner of Income Tax (Appeals) 1, Vadodara is against law and facts on the file in, as much as, he was not justified to uphold the action of the Ld. Assistant Commissioner of Income Tax, Circle-28(1), New Delhi in imposing a penalty of Rs. 10,75,083/- for alleged concealment/furnishing inaccurate particulars of income, without specifying the limb of S. 271(1)(c) of the Act under which penalty proceedings had been initiated and penalty levied. 3. That the Appellant craves to add, amend, alter, modify OR DELETE any OR all o....

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....wing substantial questions of law: (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in. holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is had in law and. invalid in spite the amendment of Section 271(1 B) with retrospective effect and by virtue of the amendment, the assessing officer has initi....

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....gs by issuing the notice u/s 274/271(1)(c) of the Act without specifying whether the assessee has concealed ''particulars of income" or furnished "inaccurate particulars of income", so as to provide adequate opportunity to the assessee to explain the show cause notice. Rather notices in this case have been issued in a stereotyped manner without applying any mind which is bad in law, hence is not a valid notice sufficient to impose penalty u/s 271(1)(c) of the Act. 8. The penalty provisions of section 271(1)(c) of the Act are attracted where the assessee has concealed the particulars of income or furnished inaccurate particulars of such income. It is also a well-accepted proposition that the aforesaid two limbs of section 271(1)(c....

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....hich the Assessing Officer has issued notices under section 274 r.w.s. 271(1)(c) of the Act without striking off the irrelevant words, as reproduced above, the penalty proceedings shows the non-application of mind by the Assessing Officer and is, thus, unsustainable. 10. In view of the facts and circumstances of the case, particularly looking to the fact that the AO has failed to record the satisfaction about any limb at the time of initiation of penalty proceedings u/s. 271(1)(c) of the Act, therefore, the penalty levied u/s. 271(1)(c) of the Act is hereby deleted. The Grounds of appeal No. 1 & 2 are thus allowed. 11. In the result, the appeal filed by the assessee is allowed. Order is pronounced in the Open Court 06.03. 2026. ....