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Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI
Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA
ORDER PER N.K. BILLAIYA, AM:
This appeal filed by the assessee is preferred against the order of the CIT(A)-5, New Delhi dated 27.05.2019 for A.Y.2015-16.
The sum and substance of the grievance of the assessee is that the CIT(A) erred in confirming the penalty levied by the AO u/s. 271 (1) (c) of the Act when the notice issued u/s. 274 of the Act was defective.
The representatives of both the sides were heard at length. Case records carefully perused. The notice u/s. 274 r.w.s 271 (1) (c) of the Act was as under :-
A perusal of the above mentioned notice clearly show that the said notice does not specify under which limb the assessee has faulted. Under similar circumstances the Hon’ble High Court of Delhi in the case of PCIT & Others Vs. M/s. Sahara India Life Insurance Company Ltd. in 426, 427 and 429/2019 order dated 02.08.2019 has held as under :-
“21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1) (c) of the Act, which was accepted by the ITAT. 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 (2016) 73 Taxman.com 241 (Kar), the appeal against which was dismissed by the Supreme Court of India in SLP No.11485 of 2016 by order dated 5th August, 2016.
On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.”
Respectfully following the decision of the jurisdictional High Court (supra) we direct the AO to delete the penalty so levied u/s. 271 (1) (c) of the Act. The appeal of the assessee is accordingly allowed.
Decision announced in the open court on 07.07.2022.