ASST.COMMISSIONER OF INCOME TAX,CENTRAL CIRCLE 2(1), HYDERABAD vs. DIVI`S LABORATORIES LIMITED, HYDERABAD

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ITA 247/HYD/2020Status: DisposedITAT Hyderabad16 November 2021AY 2016-173 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s deletion of the penalty. This was because the penalty show cause notice failed to specify whether the assessee had concealed income or furnished inaccurate particulars.

What were the facts?

The Assessing Officer imposed a penalty under Section 271(1)(c) on the assessee. The CIT(A) deleted this penalty. The Revenue appealed this deletion to the ITAT.

What were the issues?

Whether a penalty under Section 271(1)(c) is invalid if the show cause notice does not specify the exact limb of the section (concealment or inaccurate particulars) under which it is being levied.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, HYDERABAD BENCHES “A” : HYDERABAD

Before: SHRI S.S.GODARA & SHRI LAXMI PRASAD SAHU

This Revenue’s appeal for AY.2016-17 arises from the CIT(A)-12, Hyderabad’s order dated 09-12-2019 passed in case No.10131 / 2019-20, involving proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short, ‘the Act’]. Case called twice. None appeared for the assessee’s behest. It is accordingly proceeded ex-parte.

2.

We now advert to the Revenue’s sole substantive ground against the CIT(A)’s action deleting Section u/s.271(1)(c) penalty of Rs.61,32,255/- imposed in the Assessing Officer’s order dt.26-12-2018.

3.

It transpires during the course of hearing at the outset that the Assessing Officer’s corresponding penalty show cause notice dt.26-12-2018 nowhere specified as to whether the assessee had “concealed the particulars of income or furnished inaccurate particulars of income”. We quote Hon'ble jurisdictional high court’s decision Pr.CIT Vs. Baisetty Revathi [398 ITR 88] (Telangana & AP) and Mohd.Farhan A.Shaikh Vs. DCIT (2021) [125 taxmann.com 253] (Bom) (FB) that such a failure renders the entire penal mechanism as invalid. We therefore uphold the CIT(A)’s action deleting the impugned penalty on this precise legal issue alone.

4.

This Revenue’s appeal is dismissed in above terms.

Order pronounced in the open court on 16th November, 2021

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