Notice Imposing Penalty For Concealment Of Income Can't Be Issued Without Specifying The Limb: ITAT

The two-member bench of Suchitra Kamble (Judicial Member) and Waseem Ahmed (Accountant Member) has observed that the Assessing Officer and the CIT (A) have simply imposed a penalty on concealment of income under Section 271(1)(c) of the Income Tax Act without giving any opportunity to the assessee at the appellate stage, that is, before the CIT (A).

The appellant/assessee did not file a return of income for the AY 2011-12. The assessment was reopened under section 147 of the Income Tax Act, 1961, after recording the reasons for the belief that the income chargeable to tax had escaped assessment. The assessment was completed on December 21, 2016 by determining a total income of Rs. 11,36,783 and making various additions. In the meantime, penalty proceedings were initiated under Section 271(1)(c) of the Income Tax Act.

The assessee filed a reply before the Assessing Officer stating that the notice issued under Section 271(1)(c) did not specify the nature of the default committed by the assessee. The notice did not specify whether it was concealment of income or furnishing of inaccurate particulars of income. The assessee filed a return of income on 10.03.2015. Thus, the particulars of income were before the Assessing Officer, but the Assessing Officer has wrongly mentioned that a return of income was not filed.

The ITAT noted that the entire basis of imposing a penalty was concealment of income on the part of the assessee as to non-filing of the return of income by the assessee.

The Tribunal found that the Assessing Officer as well as the CIT (A) had not at all verified the fact that the assessee had filed a return of income.

The tribunal allowed the appeals of the assessee and held that the notice issued by the assessing officer should specify which limb of Section 271(1)(c) penalty proceedings has been initiated.

Case Title: Manjriben Pravinchandra Raninga Versus ITO

Citation: ITA Nos.1448 & 1449/Ahd/2019

Dated: 01.06.2022

Counsel For Appellant: Adjournment Application

Counsel For Respondent: Sr. D.R. V.K. Singh

Click Here To Read/Download Order