ACIT, CIRCLE-7(1), HYD, HYDERABAD vs. MARUTI COTTEX LTD., HYD, NALGONDA

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ITA 30/HYD/2016Status: DisposedITAT Hyderabad02 September 2021AY 2011-122 pages
AI SummaryDismissed

What did the Tribunal hold?

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

What were the facts?

The Assessing Officer imposed a penalty of Rs. 64,70,000/- under Section 271(1)(c) of the Income Tax Act. The assessee appealed this penalty to the CIT(A), who deleted it.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid if the show cause notice does not clearly specify the limb of concealment or furnishing inaccurate particulars.

Which sections of the Income-tax Act were involved?

Section 271(1)(c)

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Cases cited in this judgment(2)Show list

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

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

O R D E R PER S.S.GODARA, J.M. : This Revenue’s appeal for AY.2011-12 arises from the CIT(A)-7, Hyderabad’s order dated 28-10-2015 passed in case No.950 / CIT(A)-7 / Hyd / 2014-15 , involving proceedings u/s. 271(1)(c) of the Income Tax Act, 1961 [in short, ‘the Act’]. 2. We now advert to the Revenue’s sole substantive ground against the CIT(A)’s action deleting u/s.271(1)(c) penalty of Rs.64,70,000/- imposed in the Assessing Officer’s order dt.28- 02-2014.

3.

It transpires during the course of hearing at the outset that the Assessing Officer’s corresponding penalty show cause notice dt.28-02-2014 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. Pronounced in Open Court on 02nd September, 2021.

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