The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has quashed a penalty order by holding that the AO has not been specified under section 274 as to whether the penalty is proposed for alleged ‘concealment of income’ OR ‘furnishing of inaccurate particulars of such income.’
The appellant, Mr. Malook Nagar, filed a second appeal before the Tribunal contending that the levy of penalty of Rs 2 ,07,200/- u/s 271 (1 )(c) of the Act on addition sustained on ad-hoc, estimated basis without bringing any material on record to prove that there was concealment or furnishing of inaccurate particulars of income on the part of the appellant.
After hearing arguments from both the sides, a bench of Sh. A.D. Jain, Vice President and Dr. B. R. R. Kumar, Accountant Member observed that the notice u/s 274 r .w.s. 271 of the Income Tax Act, 1961 issued by the Assessing Officer on 15.10.2018.
“We find that the Assessing Officer has issued the penalty order stating that, you “have without reasonable cause failed to company with a notice u/s 22(4)/23(2)4 of the Indian Income Tax Act , 1922 or u/s 142(1)/143(2) of the Income Tax Act, 1961,” the Tribunal observed.
Following the order of the Jurisdictional High Court, the Tribunal quashed the penalty order observing that since the AO has not been specified under section 274 as to whether the penalty is proposed for alleged ‘concealment of income’ OR ‘ furnishing of inaccurate particulars of such income.’
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