Validity of initiation of proceedings under section 271(1)(c) of the Act was challenged since the AO had not specified the grounds in the show-cause notice issued under section 274 of the Act whether it was for ‘concealment of particulars of income’ or for ‘furnishing of inaccurate particulars of income’. The Tribunal, relying on the decision in the case of Dilip N. Shorff vs. Jt. CIT & Annr. (2007) 291 ITR 519 (SC) and CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Kar.), allowed the appeal of the assessee and held that the AO has not specifically indicated the grounds for levy of penalty whether it is for concealment of income or for furnishing inaccurate particulars of income, therefore, the show-cause notice suffers from illegality and hence, penalty is not leviable.
Gulam Farooq Ansari v. ITO (2018) 194 TTJ 719 / 168 DTR 42 (Jaipur)(Trib.)
S. 271(1)(c) : Penalty – Concealment – Penalty is not leviable where the AO has failed to mention the specific charge for levy of penalty in the show cause notice under section 274 of the Act. [S. 274]