Sagar Sanand Infrabuild Pvt. Ltd. Vs. The ITO - (Income Tax Appellate Tribunal) (28 Feb 2022)

Penalty cannot be imposed without mentioning the specific charge

MANU/IB/0092/2022

Direct Taxation

The instant appeal filed by the assessee is directed against the order passed by the Commissioner of Income Tax (Appeals) arising out of the penalty order passed by the ITO, under Section 271(1)(c) of the Income Tax Act, 1961. A short point involved in present matter as to whether the penalty can be imposed without specifying the guilt either for concealment of income or for furnishing of inaccurate particulars of income in the present facts and circumstances of the case.

The penalty has been levied by the ITO for furnishing of inaccurate particulars of income thereby concealment of income of Rs. 5,75,346 which has further been confirmed by the Learned CIT(A). Hence, admittedly, there is no specific allegation made against the assessee. It appears that the Learned ITO imposed the penalty of Rs. 1,77,782 upon being satisfied on both the limbs of guilt committed by the assessee being concealment of income and furnishing of inaccurate particulars of income under Section 271(1)(c) of the Act. But Section 271(1)(c) puts the bar in initiating as well as levying penalty on both the limbs by the revenue and restricted initiation and imposition of penalty on the specific guilt committed by the assessee, either for concealment on income or for furnishing of inaccurate particulars of income.

In the matter of Snita Transport Pvt. Ltd. vs. ACIT, it is held that, penalty cannot be imposed without mentioning the specific charge. In present case, the AO has not mentioned the specific charge/guilt in its penalty orders whether it was levied for concealment of income or for furnishing inaccurate particulars of income. Therefore, the penalty levied by the AO and confirmed by the Learned CIT (A) is not sustainable in the eye of law. The penalty, therefore, is deleted. Appeal allowed.

Tags : PENALTY IMPOSITION LEGALITY