ITAT quashes penalty imposed by the IT department
The tribunal cited an earlier order of the Bombay High Court
ITAT quashes penalty imposed by the IT department
The tribunal cited an earlier order of the Bombay High Court
The Delhi bench of the Income Tax Appellate Tribunal (ITAT) has rejected a penalty order issued by the Income Tax Department. It was because the assessing officer (AO) had failed to specify the relevant charge against the assessee as per the conditions prescribed under the Income Tax Act, 1961.
The assessee had contended before the tribunal that the penalty order was unlawful, as without specifying the exact Section of the Act, the proceedings were initiated and a penalty was imposed.
The bench comprising ITAT President G S Pannu and judicial member Challa Nagendra Prasad allowed the contention. They relied on the decision of the Bombay High Court, Goa in a previous case.
While dealing with the issue of non-strike off of the irrelevant part in the notice issued under the Act, the high court had held that the assessee had to be informed of the grounds of the penalty proceedings only through a statutory notice. It had ruled that an omnibus notice was clearly vague in nature.
Thus, granting relief to the assessee, the tribunal held that "Ratio of this full bench decision of the Bombay High Court (Goa) squarely applies to the facts of the assessee's case as the notice u/s. 274 r.w.s. 271(l)(c) of the Act were issued without striking off the irrelevant portion of the limb and failed to intimate the assessee the relevant limb and charge for which the notices were issued."
The bench thus quashed the penalty order.