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Income Tax Appellate Tribunal, DELHI BENCH “B”: NEW DELHI
Before: SHRI SHAMIM YAHYA & MS. ASTHA CHANDRA
Assessee by: Shri Gagan Kumar, Adv. Department by : Shri Vipul Kashyap, Sr. DR Date of Hearing 17.01.2023 Date of pronouncement 25.01.2023 O R D E R PER ASTHA CHANDRA, JM
The appeal by the assessee is directed against the order dated 30.04.2019 of the Ld. Commissioner of Income Tax (Appeals)-19, New Delhi (“CIT(A)”) pertaining to Assessment Year (“AY”) 2006-07.
The assessee has taken the following grounds of appeal:
1. That the order under section 250 of the Act dated 30* April 2019 passed by the Commissioner of Income Tax (Appeals) -19 [“Ld. CIT(A)
] is erroneous and bad in law.
2. That the Ld. CIT(A) has erred in confirming the penalty u/s 271(l)(c) of the Act of Rs.4,36,060/- levied on the assessee without considering and appreciating the facts and circumstances of the case and without appreciating that the Appellant had not receive the notice of hearing. 3 That in law and under the facts and circumstances of the case, the impugned order passed by the Income Tax Officer, Ward - 57(5), New Delhi (“Ld. AO”) under section 144/147 of the Act is without jurisdiction and thus void ab initio.
4. That in law and under the facts and circumstances of the case, the Ld. A.O. erred in making an addition of Rs. 14,62,150/- as undisclosed income under section 68 of the Act. 5 That in the absence of specific charge pointing out in the notice, the said notice is vague and consequently the levy of penalty u/s 271(l)(c) of Rs.4,36,060/- is arbitrary, unjust and illegal. 6 That in the absence of specific charge pointing out in the notice as well as in Assessment order, the levy of penalty u/s 271(l)(c) of Rs.4,36,060/- is arbitrary, unjust and illegal. 7. That in the absence of specific charge pointing out in the Penalty order dated 28 March, 2017, the levy of penalty u/s 271(1X0 of Rs.4,36,060/- is arbitrary, unjust and illegal. 8. That the levy of penalty is illegal, unjust and not in accordance with law as the mandatory requirements of Section 271(l)(c) of the Act have not been met in the instant case. 9. That in the absence of satisfaction in the assessment order if the assessee has furnished inaccurate particulars of income or has concealed particulars of his income, the levy of penalty by the Ld. AO under Section 271(l)(c) of the Act is arbitrary unjust and bad in law. 10. The Appellant craves for leave to add, amend, vary, omit or substitute any of the aforesaid grounds of appeal
at any time before or at the time of hearing of the appeal.
11. That all the grounds are without prejudice to each other.“
3. Briefly stated, the facts are that the Department received information that the assessee has deposited cash of Rs. 14,62,150/- in his savings bank account with Delhi Nagrik Sahkari Bank Ltd. Enquiry letter sent to the assessee was not complied with. The Ld. Assessing Officer (“AO”), after going through the legal formalities brought the said cash deposit to tax in his assessment order dated 24.01.2014 passed under section 144/147 of the Income Tax Act, 1961 (the “Act”). He initiated penalty proceedings under section 271(1)(c) of the Act.
The Ld. AO passed penalty order dated 28.03.2017 imposing penalty of Rs. 4,36,060/- under section 271(1)(c) of the Act against which the assessee filed appeal before the Ld. CIT(A) who confirmed the said penalty observing that the assessee has not controverted the findings of the Ld. AO in appellate proceedings.
Aggrieved, the assessee is in appeal before the Tribunal and all the grounds of appeal relate thereto.
The Ld. AR submitted that the penalty is not sustainable in as much as in the penalty notice issued under section 271(1)(c) of the Act, the Ld. AO has not specified the nature of default by ticking appropriate limb and this makes the impugned penalty levied devoid of valid jurisdiction. In support of his plea, the Ld. AR referred to the dicta of the Hon’ble Supreme Court in CIT vs. SSA’s Emerald Meadows (2016) 242 Taxman 180 (SC) wherein the Hon’ble Court has dismissed the SLP filed by the Department and submitted that it has consistently been followed by the Delhi Bench of the Tribunal in several cases notably, ACIL Ltd. vs. ACIT (2022) 194 ITD 708; Bhushan Lal Sawhney vs. DCIT (2021) 127 taxmann.com 642 and Smt. (Dr.) Jatinder Bhatia vs. ACIT Circle Noida ITA No. 571/Del/2016.
The Ld. DR supported the order of the Ld. CIT(A).
We have considered the rival submissions and perused the records. It is now well settled that the Ld. AO has to specify the default for which the penalty notice is issued so that the assessee is aware of the charge against him. For this purpose, it is mandatory that the relevant limb of the notice be specified whether the notice for penalty is for concealment of income or furnishing of inaccurate particulars of income. The Bombay High Court in its Full Bench decision in the case of Mohd. Farhan A. Shaikh vs. ACIT in & 57 of 2012 dated 01.03.2021 has held that no specification of charge in the penalty notice leads to same becoming void and penalty on that count is to be deleted.
However, the parties have agreed that the matter may be sent to the Ld. AO to examine from the assessment records whether the penalty notice was properly ticked or not. We consider it just and fair to remit the issue to the file of the Ld. AO to ascertain from the records whether the charge was specified or not in the penalty notice issued to the assessee. If on verification it is found that the relevant charge was not ticked off and the notice was omnibus notice, the penalty levied will not be sustainable. We remit the issue to the file of the Ld. AO with the above direction. Of course, the assessee shall be allowed adequate opportunity of being heard.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.