Income Tax Penalty SCN issued without specifying charge against taxpayer bad in law: HC
CA Pratibha Goyal | Jul 6, 2023 |
Income Tax Penalty SCN issued without specifying charge against taxpayer bad in law: HC
Honorable High Court in the matter of Principal Commissioner of Income Tax, Central-2. Kolkata Versus M/S. Industrial Safety Products Private Limited has retreated the decision of the High Court of Karnataka which was affirmed by the Hon’ble Supreme Court in the decision reported in (2016) 73 Taxmann.com 248 (SC) that that the imposition of penalty under Section 271(1)(c) of the Act is bad in law and invalid for the reasons where the show cause notice under Section 274 of Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income.
Relevant Text:
13. In Commissioner of Income-tax, Bangalore Versus SSA’S Emerald Meadows, the High Court of Karnataka following the decision in Commissioner of Income Tax Versus Manjunatha Cotton and Ginning Factory held that the imposition of penalty under Section 271(1)(c) of the Act is bad in law and invalid for the reasons where the show cause notice under Section 274 of Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The said decision of the High Court of Karnataka was affirmed by the Hon’ble Supreme Court in the decision reported in (2016) 73 Taxmann.com 248 (SC). On the same lines it is the decision of this court in Principal Commissioner of Income Tax Central – 2, Kolkata Versus Brijendra Kumar Poddar in ITAT No. 215 of 2018 dated 23.11.2021. As pointed out earlier, the show cause notice issued under Section 274 read with Section 271 of the Act did not furnish any particulars and all the relevant columns have been left blank. Thus, by applying the legal position in the aforementioned decision, this court has no hesitation to hold that the show cause notice was bad in law consequently the initiation of the penalty proceedings is vitiated.
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