The Pune Bench of Income Tax Appellate Tribunal (ITAT) has quashed the penalty under Section 271(1)(C) asthe appropriate words were not deleted in the penalty notice.
The assessee Soniya AshokkumarSachdev, had filed original return of income and the case wasselected forscrutiny under CASS and a notice under section 143(2) was served on theassessee on 22.09.2016. The Assessing Officer (AO) passed an assessment orderunder Section 143(3) ofthe Income Tax Act, 1961. The AO levied penalty under Section 271(1)(c) of the Act.
The Income-tax Act of 1961, Section271(1)(c), lists two errors or omissions that subject the assessee to aconcealing penalty. They include withholding accurate information about income and concealing income details.
M.P.Makhija on behalf of the assesseesubmitted that the noticefor penalty was defective as the AO had not specifiedthe charge towards either concealment orfilling inaccurate particulars ofincome. He relied on the Hon’ble Bombay High Court’s decision inthe case ofMohd. Farhan A. Shaikh and submitted that the Penalty was not initiatedproperlyas the AO had not struck off the irrelevant limb of the Penalty Notice.
M.G. Jasnani on behalf oftherevenue relied on the orders of the lower authorities.
TheDivision Bench of S.S. Godara,(Judicial Member) and Dipak P. Ripote,(Accountant Member) allowed the appeal holding thatthe penalty under Section271(1)(c) was not maintainable as the inappropriate words were notbeen struckout in the penalty notice, by the AO.
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