The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has held that the penalty proceedings under section 271(1)(c) of the Income Tax Act, 1961 cannot be survived if the Assessing Officer does not clearly mention the reasons for the same in terms with the conditions specified in the provision.
Earlier, the Assessing Officer passed an assessment under section 153A of the Act and consequently initiated penalty proceedings on this addition under section 271(1)(c) of the Act. The assessee contended that the penalty notice was issued without giving specific reasons.
ITAT President G S Pannu and Judicial Member Kul Bharat noted the fact that the Revenue has not controverted the fact that the facts are identical as were in the Assessment Year 2010-11 and the penalty proceeding pertaining of this year was dropped.
While deleting the penalty proceedings, the Tribunal held that “the Assessing Officer has not given any reason as to why he dropped the penalty in Assessment Year 2010-11 and sustained the imposition of penalty for Assessment Year 2009- 10 under the same set of facts. Moreover, in the impugned penalty order, the Assessing Officer has stated that non-filing of the appeal goes to demonstrate the acceptance by the assessee of furnishing/concealing of income to the tune of Rs.15,96,494/-. This observation goes to demonstrate that the Assessing Officer had not specified the charge, whether it was far furnishing of inaccurate particulars of income or concealment of income. Therefore, looking into the facts where the Assessing Officer under the same set of facts has dropped the penalty in Assessment Year 2010-11, therefore, the penalty in this year also cannot be sustained, hence, deleted. Grounds raised in the appeal are allowed.”
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