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03-01-2020, Rajendra Kumar Khandelwal, Section 271(1)(c), Tribunal Jaipur

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8 months 3 weeks ago #11918 by amit
Section - 271(1)(c), 274, 147, 148
Order Date - 03-01-2020
Favouring - Assessee
Court - Tribunal Jaipur
Appellant - Rajendra Kumar Khandelwal
Respondent - DCIT
Citation - 120Taxpundit40
Appeal No. - ITA No. 1094/JP/2019
Asstt. Year - 2009-10



This is an appeal filed by the assessee against the order of ld.CIT(A)-2, Jaipur dated 24/06/2019 for the A.Y. 2009-10 in the matter of imposition of penalty U/s 271(1)(c) of the Income Tax Act, 1961 (in short, the Act), wherein the assessee has raised following grounds of appeal:

“1. The impugned penalty order u/s 271(1)(c) dated 24/06/2019 is bad in law and on facts of the case, for want of jurisdiction and various other reasons and hence the same kindly be quashed.

2. Rs. 3,71,743/-: The ld. CIT(A) erred in law as well as on the facts of the case confirming the penalty imposed u/s 271 (1)(c) of the Act. The penalty so imposed by the AO and confirmed by the ld. CIT(A), being totally contrary to the provisions of law and facts kindly be deleted in full.

3. That the show cause notice issued u/s 274 and the consequent impugned penalty order dated 24/06/2019, is quite vague and does not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated and/or imposed i.e. whether for concealment of particulars of income or furnishing or inaccurate particulars of income. The impugned penalty order being contrary to the jud cial principle laid down kindly be quashed.

4. That appellant prays your honour indulgences to add, amend or alter of or any of the grounds of the appeal on or before the date of hearing.”

2. Rival contentions have been heard and record perused. Facts in brief are that the assessee is having income from capital gains and interest. After issuance of notice U/s 148 of the Act, the A.O. initiated reassessment proceedings U/s 147 of the Act. While completing the assessments u/s 147/143(3) of the Act and with respect to the income so offered in the return of income and accepted by the AO, the AO initiated penalty proceedings u/s 271(1)(c) and notice u/s 274 dated 05.12.2016 was issued in response to which the assessee filed a detailed reply dated 27.12.2016. The AO, however, felt dissatisfied and held that the assessee has concealed his particulars of income and concealed his taxable income and finally, imposed the penalty of Rs. 3,71,743/- u/s 271(1)(c) of the Act. By the impugned order, the ld. CIT(A) has confirmed the action of the A.O., against which the assessee is in further appeal before the ITAT.

3. The assessee has challenged the merit of the penalty imposed in so far as there was no variation in the income assessed vis a vis income returned U/s 147 of the Act. The assessee has also challenged the validity of penalty order on the plea of show cause U/s 274 and consequent impugned penalty order U/s 271(1)(c) of the Act dated 24/06/2019 is vague.

4. The ld DR has relied on the orders of the authorities below and contended that the A.O. was correct in imposing penalty with respect to interest income not shown by the assessee.

5. It was argued by the ld AR that the entire income of Rs. 14,10,347/- was interest income only and it was TDS suffered income. Admittedly, the same amount was shown in the return of income filed in repose to Section 148 of the Act. It is not the case of the AO that even after issuance of notice u/s 148 of the Act the assessee did not disclose the true and correct income fully inasmuch as admittedly there is no variation in the returned income and assessed income. Also it is not the case of the AO that the assessee did file the return of income initially u/s 139(1) of the Act, wherein the interest income was not disclosed fully/partly and therefore there was a concealment when assessed with the assessee’s income. Thus, it is clear that there is no difference between the returned and assessed income.

6. So far as the assessee’s allegation regarding vagueness in the notice U/s 274 of the Act is concerned, I found on perusal of the show cause notice issued u/s 274 r/w S. 271(1)(c) dated 05.12.2016, wherein it is not at all clear as to for what precise charge, the assessee was asked to show cause viz. whether the charge is that the assessee has furnished inaccurate particulars of income or it was for concealing particulars of such income inasmuch as a bare perusal of the said show cause notice clearly reveal that the inappropriate words/unwanted charge has not been struck off. The AO neither scored out nor ticked which particular part of alleged offence, he was relying inasmuch as the word or has been used between the two offences in the SCN.

7. The extract from SCN, is reproduced hereunder:

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