Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: SH. N. K. BILLAIYA & SH. KUL BHARAT
PER N.K. BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the CIT(A)-36, New Delhi dated 27.05.2019 for A.Y.2010-11.
The grievance of the assessee read as under :-
The assessee vide letter dated 01.09.2022 requested for the admission of the following additional grounds of appeal under Rule 11 of the ITAT Rules :-
We have carefully perused the additional grounds (supra). By way of the additional grounds appellant seeks to raise certain legal/ jurisdictional contention to contest the validity of the penalty order and the penalty proceedings carried out against the appellant. We are of the considered view that the aforesaid grounds are borne are out of the original grounds of appeal thus requires no verification of new facts and are, therefore, admitted in view of the decision of the Hon’ble Supreme Court in the case of NTPC 229 ITR 383.
A perusal of the notice dated 11.01.2013 issued u/s. 274 r.w.s. 271 of the Act is as under :-
Show cause notice dated 06.04.2018 issued u/s. 271 (1) (c) of the read as under :-
A perusal of the assessment order show that after making each addition the AO has mentioned “ I am also satisfied that it is a fit case for initiation of penalty proceedings u/s. 271 (1)(c) of the Act” this clearly show that the AO at the assessment stage itself was not sure whether the additions made by him amount to concealment of the particulars of income or furnishing inaccurate particulars of income. It is clear that the charge is not specific. The Hon’ble High Court of Delhi in the case of Sahara India Life Insurance Company limited has the occasion to consider a similar situation and while deciding the identical issue held as under :- “21. The Respondent had challenged the upholding of the penalty imposed under Sec. 271(1)(c) of the Act, which was accepted by the IT AT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1) (c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA's Emerald Meadows 73 Taxmann.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No. 11485 by order dated 5th August 2016.
Following the decisions rendered in the cases of CIT vs. Manjunatha Factory, CIT vs. SSA’s Emerald Meadows and Pr.
CIT Vs Sahara India Life Insurance Company Ltd. (supra), we are of the considered view that when the notice issued by the AO is bad in law being vague and ambiguous having not specified under which limb of section 271(1)(c) of the Act, the penalty proceedings initiated u/s 271(1)(c) are not sustainable.
In view of what has been discussed above, following the decisions rendered by Hon’ble High Courts discussed in the preceding paras and without entering into the other aspects of the case, we are of the considered view that when the very initiation of the penalty by way of issuance of vague and ambiguous notice u/s 271(1)(c) read with section 274 of the Act without specifically charging the assessee if he has concealed the particulars of income or has furnished inaccurate particulars of such income, subsequent penalty proceedings are not sustainable, hence penalty levied by the AO and confirmed by the Id. CIT (A) is not sustainable and as such, the appeal filed by the assessee is allowed.
Considering the totality of the facts in light of the judicial decisions [supra] we direct the Assessing Officer to delete the penalty u/s 271(1)(c) of the Act amounting to Rs. 6,22,300/-.
Decision announced in the open court on 05.09.2022.