NEELIMALA ESTATES PRIVATE LIMITED,HYDERABAD vs. INCOME TAX OFFICER, WARD-16(2), HYDERABAD

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ITA 677/HYD/2018Status: DisposedITAT Hyderabad19 July 2021AY 2005-063 pages

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

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal deleted the penalty. It held that the Assessing Officer's show cause notice failed to specify whether the assessee concealed income or furnished inaccurate particulars, rendering the penalty unsustainable.

What were the facts?

The assessee appealed against penalty orders under Section 271(1)(c) for AYs 2004-05 and 2005-06. The lower authorities had imposed penalties, which were upheld by the CIT(A).

What were the issues?

The primary issue was the validity of the penalty under Section 271(1)(c) due to a vague show cause notice. The Tribunal considered whether the notice adequately informed the assessee of the specific contravention.

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

These two assessee’s appeals for AYs.2004-05 & 2005-06 arises from the CIT(A)-4, Hyderabad’s order dated 18-01-2018 passed in case Nos.0179 & 0180/ 2016-17 / ITO, Wd.16(2) / CIT(A)-4 / Hyd / 17-18, involving proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short, ‘the Act’]. Cases called twice. None appeared for the assessee’s behest. It is accordingly proceeded ex-parte.

2.

We now advert to the assessee’s sole substantive grievance in both the assessment years, challenging correctness of both the lower authorities’ action imposing

:- 2 -: & 677/Hyd/2018 Section 271(1)(c) penalty of Rs.2,81,391 (for AY.2004-05) & Rs.1,17,519/- (for AY.2005-06) in Assessing Officer’s penalty order(s) dt.26-03-2013 as upheld in the CIT(A)’s lower appellate order.

3.

Learned departmental representative fails to dispute at the outset that the Assessing Officer’s penalty show cause notice nowhere specified as to whether the assessee had concealed particulars of his taxable income or furnished inaccurate particulars of such an income as contemplated u/s. 271(1)(c) of the Act. Hon'ble jurisdictional high court’s decision Pr.CIT Vs. Baisetty Revathi [398 ITR 88] (Telangana & AP) holds that such a failure renders penal action as not sustainable in law. The very legal preposition also stands reiterated in Mohd.Farhan A.Shaikh Vs. DCIT (2021) [125 taxmann.com 253] (Bom) (FB) as well. We therefore delete the impugned penalty on this precise legal issue.

4.

These two assessee’s appeals are allowed in above terms. A copy of this common order be placed in the respective case files.

Order pronounced in the open court on 19th July, 2021

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