Sec. 271(1)(c) of Income Tax Act, 1961— Penalty — Imposition of penalty cannot be sustained as notice issued u/s 274 does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income

Facts: Assessee being aggrieved of the order of AO and CIT(A) went on appeal before Tribunal and raised the ground that invalid notice was served upon the assessee u/s. 274 read with sec. 271 and contended that the notice issued by the AO proposing penalty u/s. 271(1)(c) is defective in nature, since it had not spelt out the specific fault/charge as to whether ‘assessee had concealed the particulars of his income’ or ‘furnished inaccurate particulars of such income’ and drew attention to the notice issued by the AO u/s. 274 read with section 271 of the Act. AO has not stricken out the irrelevant portion of the fault/charge which would have spelt out the specific fault/charge against the assessee. According to the assessee, since the proposed notice itself is a defective, all subsequent action are bad in law and therefore the penalty imposed by the AO u/s. 271(1)(c) and confirmed by the Ld. CIT(A) should be cancelled.

Held, that the show cause notice issued in the present case u/s 274 does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice u/s 274 does not strike out the inappropriate words. In these circumstances, imposition of penalty cannot be sustained, therefore, it was held that imposition of penalty and subsequently confirmed by the Ld. CIT(A) in the present case cannot be sustained and the same is hereby deleted. - BENI MADHAB PAUL V/s ITO - [2020] 26 ITCD Online 061 (ITAT-GUWAHATI)