RNT ASSOCIATES PRIVATE LIMITED,MUMBAI vs. DCIT CIRCLE 3(3)(1), MUMBAI
Income Tax Appellate Tribunal, MUMBAI BENCH “D” MUMBAI
Before: SHRI OM PRAKASH KANT () & SHRI RAHUL CHAUDHARY () Assessment Year: 2011-12
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated
07.07.2025 passed by the Ld. Commissioner of Income-tax
(Appeals) – National Faceless Appeal Centre, Delhi [in short ‘the Ld.
CIT(A)’] for assessment year 2011-12, in relation to penalty levied by the Assessing Office u/s 271(1)(c) of the Income-tax 1961 (in short
‘the Act’) vide order dated 25.03.2023. 2. The grounds rai
1) The learn by the Ld. A in law.
2) The learn by the Ld. A furnished, w not specified nor in issuin
3) The learn
Ld. AO of no u/s 271(1)(c details or con
4) The learn
Ld. AO in im details were there were n which attrac
5) The learn
Ld. AO in im
Rs. 11,54,98
was on acco imagination by the appel
6) The learn
AO in impos
AO was on a 7) The learn
AO by igno appellant a judgements facts of this 3. Briefly stated, fa is a company engage ised by the assessee are reprodu ed CIT(A) erred in confirming the pen
AO u/s 271(1)(c) of Rs. 3,56,891/- wh ed CIT(A) erred in confirming the pen
AO on the ground that inaccurate de without appreciating the fact that the d by the Ld. AO neither in its order u ng the penalty notice dated 25.03.2014
ned CIT(A) erred in confirming the ac ot specifying the limb under which th c) is to be issued, i.e. furnishing ncealment of income.
ned CIT(A) erred in confirming the ac mposing penalty on the ground that e furnished, without appreciating the no inaccurate details furnished by the ct penalty proceedings u/s 271(1)(c).
ned CIT(A) erred in confirming the ac mposing penalty of Rs. 3,56,891/- on a 88 without appreciating the fact tha ount of notional interest which by no can be said as inaccurate furnishing llant.
ned CIT(A) erred in confirming action ing penalty even though the addition ad hoc basis.
ned CIT(A) erred in confirming the ac oring the judicial decision relied upo and confirming the penalty based which are not relevant s case.
acts of the case are that the ass ed in the business of manageme
RNT Associates Pvt. Ltd.
2
uced as under:
nalty levied hich is bad nalty levied etails were same was u/s 143(3)
4. tion of the he penalty inaccurate tion of the inaccurate e fact that e assessee tion of the addition of at addition o stretch of g of details of the Ld.
by the Ld.
tion of Ld.
on by the d on two to the sessee before us ent consultancy.
The assessment for under Section 143(3
order dated 25th M
Officer made an add
15.50%, amounting penalty proceedings thereto, and after du being one hundred order dated 7th Janu
4. On appeal, the sustained the penalty of the assessee. Hen in further appeal.
5. We have heard have perused the ma in Ground No. 1 per being contended tha precise charge—viz concealment of inco thereof. It is urged th before the Learned C ab initio.
the year under consideration
3) of the Income-tax Act, 1961
March, 2014, wherein the Lea ition by estimating notional int to ₹53.28 lakhs, and simultan under Section 271(1)(c) of the ue process, penalty was levied percent of the tax sought to b uary, 2022. Learned Commissioner of Incom y, rejecting the contentions adv ce, the assessee has approache the learned representatives of aterial on record. The primary g rtains to the validity of the pe at the Assessing Officer did
. whether the penalty was ome or for furnishing inaccu hat this fundamental defect, hav
CIT(A) but not adjudicated, vitia
RNT Associates Pvt. Ltd.
3
was completed
(“the Act”) vide arned Assessing terest income at neously initiated e Act. Pursuant at ₹3,56,891/–, be evaded, vide me-tax (Appeals) anced on behalf ed this Tribunal both sides and grievance raised enalty notice, it not specify the s initiated for rate particulars ving been raised ates the penalty
1 The learned cou Book comprising pag assessment order da issued under Section scrutiny thereof, communications—the 274 dated 25th Marc dated 6th August, 20 specify the distinct form, and the inappli 5.2 This aspect is n Court in ACIT v. Md. authoritatively held t in a mechanical ma portion and without “concealment of in particulars,” such a violates the principle of natural justice. Th limbs under Section and that a vague o Hon’ble Bombay Hig issued on a pre-prin charge is invalid. The unsel for the assessee placed be ges 1 to 56, containing, inter al ated 25th March, 2014 and the n 274 read with Section 271 it is manifest that in n e assessment order, the notice ch, 2014, or the subsequent sho 021—the Assessing Officer appl charge. The notices are in st icable portion has not been stru no longer res integra. The Hon’b Farhan A. Shaikh [(2021) 434 IT that where a notice under Sectio anner, without striking out t t indicating clearly whether th ncome” or for “furnishing a notice betrays non-applicatio s of audi alteram partem—the v he Hon’ble Court further observ 271(1)(c) are distinct and mut or omnibus notice is incurably gh Court (supra) held that a nted form without striking out e Hon’ble Court found that suc RNT Associates Pvt. Ltd. 4 efore us a Paper ia, copies of the penalty notices of the Act. On none of these e under Section ow-cause notice lied his mind to tandard printed uck off. le Bombay High TR 1 (Bom)] has on 274 is issued the inapplicable he charge is for of inaccurate on of mind and very cornerstone ved that the two tually exclusive, y defective. The a penalty notice the inapplicable h an ambiguous notice indicates a no (AO) and violates the must be clearly infor emphasized that the and an omnibus notic ground are according 5.3 In the present available on PB- 40 initiated “for furn /concealment of inc the mind of the A assessment order is r “5.16 In view assessee ha determined transaction o section 92C (1) (c) of the particulars of 5.4 The same ambig copy of which (Paper ready reference said n on-application of mind by the A e principles of natural justice, a rmed of the specific charge. The two charges under Section 271( ce is defective and penalty orde ly liable to be dismissed. case, the assessment order da , itself records that penalty pr nishing inaccurate particular ome”—an expression reflecting Assessing Officer. The relevan reproduced as under: w of the above discussions, total inco aving regard LO the Arm's Length at Rs.53,28,069/- regarding int of advancing loan to its AE as per pro of the IT Act 1961. Penalty proceedin IT Act is also initiated for furnishing of income(concealment of income.” guity pervades the notice under r Book page 24) has been exam notice is reproduced as under: RNT Associates Pvt. Ltd. 5 Assessing Officer as the assessee e Hon’ble Court (1)(c) are distinct er based on such ated 25.03.2014 roceedings were rs of income g uncertainty in nt part of the ome of the h Price is ternational ovisions of ng u/s 271 inaccurate r Section 274, a mined by us. For 5.5 Further, in sh Assessing Officer has penalty.
ow cause notice dated 06.08
s not referred to specific charge
RNT Associates Pvt. Ltd.
6
8.2021 also the e for levy of the 5.6 The omission to technicality; it goes remedium—where the and the assessee can of the Revenue.
5.7 In background decision of the Hon
Farhan A. Shaik (s
Assessing Office and CIT(A) on the issue i
No. 2 and 3 of the a grounds are only ren
6. In the result, th
Order pronoun (RAHUL CHA
JUDICIAL M
Mumbai;
Dated: 30/10/2025
Rahul Sharma, Sr. P.S.
o strike out the inapplicable lim s to the root of juri iction ere is a wrong, the law must af nnot be made to suffer for the pr of the above facts of the case n’ble Bombay High Court in th supra), we cancel the penalty upheld by the Ld. CIT(A). The in dispute is accordingly set asi appeal of the assessee are allo dered academic.
he appeal of the assessee is allow ced in the open Court on 30/
d/-
S
AUDHARY)
(OM PRAK
MEMBER
ACCOUNTA
RNT Associates Pvt. Ltd.
7
mb is not a mere n. Ubi jus ibi fford a remedy—
rocedural lapses
, relying on the he case of Md.
y levied by the order of the Ld.
ide. The ground owed. The other wed.
10/2025. KASH KANT)
ANT MEMBER
Copy of the Order forward
1. The Appellant
2. The Respondent.
3. CIT
4. DR, ITAT, Mumbai
5. Guard file.
////
ded to :
BY ORDER
(Assistant Re
ITAT, Mu
RNT Associates Pvt. Ltd.
8
R, gistrar) umbai