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Facts
The assessee's three appeals were against the CIT(A)/NFAC's orders upholding the Assessing Officer's imposition of penalties under section 271(1)(c) for furnishing inaccurate particulars of income for assessment years 2007-08, 2008-09 & 2009-10.
Held
The Tribunal admitted the assessee's additional ground that the penalty proceedings were vitiated because the Assessing Officer's show-cause notices under section 271(1)(c) r.w.s. 274 did not specify any specific limb as to whether the assessee had concealed or furnished inaccurate particulars of income.
Key Issues
Whether penalty proceedings under section 271(1)(c) are vitiated if the show-cause notice fails to specify the limb of concealment or furnishing inaccurate particulars.
Sections Cited
271(1)(c), 274
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Income Tax Appellate Tribunal, DELHI BENCH: “SMC” NEW DELHI
Before: SHRI SATBEER SINGH GODARA
ORDER These assessee’s three appeals 2412 & 2413/Del/2025 for assessment years 2007-08, 2008-09 & 2009- 10, are directed against the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s orders, all dated 10.02.2025, having DINs and orders no. ITBA/NFAC/S/250/2024-25/1073060920(1), ITBA/NFAC/S/250/2024-25/1073061049(1) and ITBA/NFAC/S/ 250/2024-25/1073061947(1), respectively involving proceedings under section 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Heard both the parties. Case files 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(ies) in question amounting to Rs.41,86,460/-; Rs.46,88,240/- and Rs.6,62,805/- for assessment years 2007-08, 2008-09 & 2009-10 vide Assessing Officer’s orders dated 29.05.2023 and 30.05.2023; respectively, which stand upheld in the CIT(A)’s detailed lower appellate discussion.
The assessee has first of all sought to raise his additional ground(s) that once the learned Assessing Officer had admittedly issued his as many penalties show- cause notices u/s 271(1)(c) r.w.s. 274 of the Act not specifying any specific limb as to whether the assessee had concealed or furnished inaccurate particulars of taxable income, thereunder, his failure to this effect vitiates the entire proceedings. The Revenue on the other hand has vehemently objected to admission of the assessee’s instant additional ground at this belated stage. I am of the 2 | P a g e considered view that hon’ble apex court landmark decision in National Thermal Power Co. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) has settled the issue long back in assessee’s favour and against the department that the tribunal could very well entertain such an additional ground to determine correct tax liability provided all the relevant facts forming part of the record. It is made clear that the Revenue has nowhere disputed the contents of the learned Assessing Officer’s show-cause notice dated 30.03.2015 herein.
Faced with this situation, I admit the assessee’s instant additional ground and 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 penalty show- cause notice forming part of the case records, his failure to this clinching effect indeed vitiates the penalty(ies) proceedings itself. Ordered accordingly.
All other pleadings on merit in the assessee’s instant three appeals stand rendered academic.