M/S SRI JYOTHI MEDICAL HALL,HYDERABAD vs. ITO, HYDERABAD

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ITA 1049/HYD/2010Status: DisposedITAT Hyderabad04 May 2021AY 2004-054 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 held that the penalty notices issued by the Assessing Officer were invalid because they did not specify under which limb of Section 271(1)(c) the penalty was being proposed. This failure was not condonable, following the jurisdictional High Court's decision.

What were the facts?

The assessee's appeals were against penalties imposed under Section 271(1)(c) of the Income Tax Act, 1961. These penalties were levied due to disallowances and additions made in the quantum assessment proceedings.

What were the issues?

The primary issue was the validity of penalty notices that failed to specify the limb of Section 271(1)(c) under which the penalty was 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(3)Show list

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

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

2.

It transpires at the outset that we need not delve much deeper in the facts of the instant cases. Suffice to say, both the learned lower authorities have imposed Section 271(1)(c) penalties on the assessee in view of the disallowance(s)/addition(s) made in the course of quantum assessment(s) upheld upto tribunal order dt.29-09-2017 in to 475/Hyd/2007 respectively.

3.

Coming to the impugned identical penalties of Rs.9,20,000/-, Rs.8,60,000/- and Rs.9,60,000/-; respectively, we notice from a perusal of the case files and with the able assistance coming from Revenue’s side that the Assessing Officer’s identical corresponding show cause notice(s); all dt.23-03-2006, had nowhere specified as to under which limb he proposed to take recourse to the penal mechanism under the provisions of the Act. Hon'ble jurisdictional high court’s decision in Pr.CIT Vs. Baisetty Revathi (2017) 398 ITR 88 (Telangana & AP) holds that such a default renders the impugned penalty invalid.

4.

Mr.Pandey quoted (2017) 84 taxmann.com 51 (Mum), Sundaram Finance Ltd. (2018) 93 taxmann.com 250 (Madras), dt.28-11-2017 Jyothirmoy Yamsani Vs. DCIT upholding identical penalties after concluding that such a failure is very much condonable. None of the said decision could apply to the exclusion of the hon'ble jurisdictional high court’s foregoing judgment. We therefore

:- 3 -: 1048 & 1049/Hyd/2010 direct the Assessing Officer to delete the impugned penalty(ies) for this precise reason alone.

5.

These 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 4th May, 2021

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