KUSHAL KRYASHALA (P) LTD,NEW DELHI vs. ACIT CIRCLE-14(2), NEW DELHI

PDF · subscribers
ITA 6125/DEL/2019Status: DisposedITAT Delhi07 July 2022AY 2015-164 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 notice issued under Section 274 r.w.s 271(1)(c) was defective as it did not specify under which limb of Section 271(1)(c) the penalty proceedings were initiated. Following the jurisdictional High Court's decision, the penalty was directed to be deleted.

What were the facts?

The assessee's appeal was against the CIT(A)'s order confirming the penalty levied by the AO under Section 271(1)(c). The primary grievance was that the notice issued under Section 274 of the Income Tax Act was defective.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid if the notice issued under Section 274 does not specify the specific limb of the section under which the penalty is being levied.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(2)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, DELHI BENCH ‘C’, NEW DELHI

Before: SH. N. K. BILLAIYA & MS. ASTHA CHANDRA

Hearing: 07/07/2022Pronounced: 07/07/2022

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.

2.

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.

3.

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 :-

4.

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.

22.

On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.”

5.

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.

6.

Decision announced in the open court on 07.07.2022.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →