Thursday, February 1, 2018

Recording of reason for imposing penalty is compulsory u/s 271(1)?

Indrani Sunil Pillai vs. ACIT (ITAT Mumbai)- 23 Jan 2018

Some of the important discussions of the case for our easy reference-


1- Learned Departmental Representative justifying the imposition of penalty submitted that even in the absence of mentioning of specific charge either in the assessment order or in the show cause notice, the penalty order cannot be considered to be bad–in–law as the Assessing Officer has complied to the statutory mandate by issuing show cause notice to the assessee before imposition of penalty. Therefore, he submitted, there is no necessity to interfere with the decision of the first appellate authority. In support of his contention, learned Departmental Representative relied upon the judgment dated 22nd August 2017, of the Hon'ble Jurisdictional High Court in ITA no.21 of 2008 in M/s. Maharaja Garage & Co. v/s CIT.

2- Further, not striking–off the inappropriate words in the show cause notice issued under section 274 of the Act by not mentioning the exact charge for which he intends to impose penalty under section 271(1)(c), the assessee was deprived of a fair and reasonable opportunity to effectively deal with the issue of imposition of penalty. Therefore, in our considered opinion, imposition of penalty in the present case cannot be supported. In this context, we would like to rely upon the decision of the Co–ordinate Bench in case of Vidhyavardhini v/s ACIT, ITA no.3730/Mum./2014, order dated 10th November 2017

For reading full text of the case please refer link - http://itatonline.org/archives/indrani-sunil-pillai-vs-acit-itat-mumbai-s-2711c-penalty-if-the-ao-has-not-recorded-any-satisfaction-in-absolute-terms-whether-the-assessee-has-concealed-particulars-of-income-or-has-furnished-i/indrani-sunil-pillai-penalty-ambiguous-notice/

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