A defect in the notice of not striking the relevant words vitiates the penalty under the Income Tax Act

IN THE INCOME TAX APPELLATE TRIBUNAL
PUNE BENCH “A”, PUNE – VIRTUAL COURT

BEFORE SHRI R.S. SYAL, VICE PRESIDENT AND
SHRI S.S. VISWANETHRA RAVI, JUDICIAL MEMBER

ITA No.1547/PUN/2017
Assessment Year : 2013-14 

ACIT, Circle-3,
Aurangabad.
Appellant 

Vs. 

Shri Vithalrao Rangnathrao
Ambarwadikar
Plot No.196, Samarth Nagar,
Aurangabad
PAN : AELPA0579F
Respondent

Assessee by Shri M.K. Kulkarni
Revenue by Shri Deepak Garg

Date of hearing 26-04-2021
Date of pronouncement 26-04-2021

ORDER

PER R.S.SYAL, VP :

This appeal by the Revenue is directed against the order passed by the CIT(A)-2, Aurangabad on 13-04-2017 deleting penalty of Rs.2,26,23,440 imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter also called `the Act‟) in relation to the assessment year 2013-14.

2. Briefly stated, the facts of the case are that the assessee is an individual engaged in the business of petrol pump. A return was filed declaring certain income. During the course of assessment proceedings, the Assessing Officer (AO) observed that the assessee earned remuneration of Rs.4 lakh from a firm, M/s. Ambarwadikar and Co., which was credited to the capital but not offered for taxation. On being called upon to explain the reasons for such non-disclosure of income in the return, the assessee offered the said amount for taxation. In the same manner, the assessee earned capital gain of Rs.9,92,38,664 on the transfer of certain lands to the Deogiri Nagari Sahakari Bank Ltd., but did not offer any capital gain in the return of income. When the assessee‟s attention was drawn to this fact, he again agreed for the addition. Thus, the AO made additions, inter alia, for the above amounts on the basis of admission by the assessee. Subsequently, penalty was imposed u/s 271(1)(c) of the Act after issuing notice u/s 274 of the Act. The ld. CIT(A) observed that the notice issued by the AO u/s 274 contained both the limbs viz., concealment of income and furnishing of inaccurate particulars of income and none of the two was struck off, as against the penalty order having been passed only for concealment of income. 

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