Specific limb must be mentioned in the Notice of Penalty u/s 271: ITAT [Read Order]

The Income Tax Appellate Tribunal (ITAT), Ahmedabad bench comprising, Ms Suchitra Kamble, JM and Shri Waseem Ahmed, AM has held that a notice of penalty u/s 271 of Income Tax Act,1961 must mention the specific limb.

The assessee has not filed a return of income and 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 by determining a total income of Rs.11,36,783/- with various additions and Penalty proceedings initiated under Section 271(1)(c) of the Act. 

The assessee contended that the notice issued under Section 271(1)(c) of the Act did not specify the nature of default committed by the assessee as to whether it was the concealment of income or furnishing of inaccurate particulars of income. 

It was observed that the assessee filed a return of income, but the Assessing Officer has wrongly mentioned that the return of income was not filed. The assessee has filed a return of income which was submitted before the Assessing Officer as well as before the CIT(A) and quoted in the written submissions in both the orders. Further observed that the Assessing Officer, as well as the CIT(A), has not verified the return filed by the assessee and imposed a penalty on concealment of income under Section 271(1)(c) of the Act without giving any opportunity to the assessee.

The Tribunal observed that the notice issued under Section 271(1)(c) read with Section 274 of the Act doesn’t mention the specific limb. The appeal filed by the assessee was allowed. Shri V.K. Singh appeared on behalf of the respondent.

To Read the full text of the Order CLICK HERE

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