· The penalty order passed by the AO did not specify the limb of section 271(1)(c) under which the penalty had been initiated, i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income.
· The Tribunal as well as the Hon’ble High Court while deciding the appeal in favour of the assessee have relied upon the judgment of Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565.
· The Apex Court, while dismissing the SLP filed by the Revenue held that the omission by the AO to explicitly specify in the penalty notice as to whether penalty proceedings were initiated for furnishing of inaccurate particulars of income or for concealment of income makes the penalty order liable for cancellation.
For further reading, refer the attachment.
Further Reading