GAUTAM AUTOMOBILES PRIVATE LIMITED,NEW DELHI vs. ACIT, C R BUILDING

This assessee’s appeal for assessment year 2014-15, arises against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2024-25/1071415601(1), dated 20.12.2024 involving proceedings under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’). Heard both the parties. Case file perused.

It emerges at the outset during the course of hearing that both the learned lower authorities have held the assessee to have furnished it’s inaccurate particulars of income to levy section 271(1)(c) penalty in question amounting to Rs.2,81,022/- vide Assessing Officer’s order dated 27.03.2019 which stands upheld in the CIT(A)’s detailed discussion.

The assessee has first of all raises it’s legal argument that once the learned Assessing Officer had admittedly issued his penalty show-cause notice(s) u/s 271(1)(c) r.w.s. 274 of the Act 14.09.2016, not specifying any specific limb thereunder, his failure to this effect vitiates the entire proceedings. The Revenue on the other hand has vehemently argued that such a defect is only a procedural one only which is not fatal to the impugned penalty.

Faced with this situation, we quote PCIT Vs. Sahara India Life Insurance Co. Ltd. (2021) 432 ITR 84 (Del.) and PCIT Vs. Gopal Kumar Goyal (2023) 153 taxmann.com 534 (Del.) to conclude that once the learned Assessing Officer has not specified the corresponding limb in his section 2 | P a g e 271(1)(c) penalty show-cause notice forming part of the case records, his failure to this clinching effect indeed vitiates the penalty proceedings itself. We order accordingly.

All other pleadings on merit in the assessee’s instant appeal stand rendered academic.