LSV MICRO DEVICE PVT LTD,DELHI vs. ACIT/DCIT, CENTRAL CIRCLE 18, JHANDEWALAN

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ITA 1161/DEL/2026Status: DisposedITAT Delhi27 July 2026AY 2018-194 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 penalty notice issued under Section 270A was invalid because it did not specify whether the proceedings were for 'under-reporting' or 'misreporting' of income. This lack of specificity renders the penalty unsustainable.

What were the facts?

The assessee's appeal challenges a penalty order under Section 270A of the Income Tax Act. The penalty was upheld by the CIT(A) despite the assessee arguing that the penalty order was passed without proper notice and opportunity of hearing.

What were the issues?

Whether a penalty under Section 270A is valid if the notice initiating the proceedings does not specify the limb of the section (under-reporting or misreporting) under which it is levied.

Which sections of the Income-tax Act were involved?

Section 270A,Section 250,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, DELHI BENCH “F”, NEW DELHI

Before: SHRI VIMAL KUMAR & SHRI MANISH AGARWAL

For Appellant: Shri R P Mall, Adv
For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 22.07.2026Pronounced: 27.07.2026

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”, NEW DELHI BEFORE SHRI VIMAL KUMAR, JUDICIAL MEMBER AND SHRI MANISH AGARWAL, ACCOUNTANT MEMBER ITA No. 1161/Del/2026, A.Y. 2018-19 LSV Micro Device Pvt. Ltd. Vs. ACIT/DCIT, B-28, Sawan Park, Central Circle 18, Ashok Vihar, New Delhi New Delhi �थायीलेखासं./जीआइआरसं./PAN/GIR No: AAACL6719J Appellant .. Respondent Appellant by : Shri R P Mall, Adv. Respondent by : Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 22.07.2026 Date of Pronouncement 27.07.2026 O R D E R PER VIMAL KUMAR, JM:

The appeal filed by the appellant/assessee is against order dated 11.11.2025 of the ld. Commissioner of Income Tax (Appeals)-27, New Delhi (hereinafter referred to as ‘the CIT(A)’) u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of penalty order dated 04.03.2024 u/s 270A

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of the Act for A.Y. 2018-19 in pursuance of assessment order dated 31.03.2021.

2.

Ld. Authorized Representative for appellant/assessee submitted that Ld. CIT(A) erred in upholding penalty order levying penalty of Rs. 8,38,564/- u/s 270A of the Act. Ld. CIT(A) failed to notice that penalty order was passed without issuance of notice and affording opportunity of hearing to the assessee. Ld. CIT(A) failed to appreciate that Ld. CIT(A) vide order dated 30.12.2022 had partly allowed the appeal. Reliance was placed at Sandeep Thakur vs. ITO [2026] 188 taxmann.com 351 (Delhi-Trib.) order dated 10.07.2026.

3.

Ld. Departmental Representative relied on impugned order.

4.

From examination of record in light of aforesaid rival contentions, it is crystal clear that notice dated 31.03.2021 and 19.01.2024 mention under-reporting of income in consequence of misreporting. So, it is evident that notice u/s 271A did not specify the transgression of specific provision of Section 270A(2) or 270A(9). A co-ordinate Bench in ITA No. 4172 to 4175/Del/2025, dated 10.11.2025, DCIT vs. Ajay Vision Education (P.) Ltd. [2025] 180 taxmann.com 395 (Delhi-Trib.) observed as under:

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“12. A perusal of the aforementioned notice u/s 270A clearly shows that the Assessing Officer did not specify under which limb of the provision he has initiated the proceedings, whether for mis-reporting or under reporting. This is a legal requirement as the penal proceedings being separate from assessment proceedings, it is incumbent upon the Assessing Officer to demonstrate under which limb he is proposing to levy of penalty while initiating penalty proceedings u/s 270A of the Act. We find in the instant case, the notice u/s 270A also does not specify the transgression of specific provisions u/s 270A (2) or 270A(9). We are of the considered view that there is no reason to interfere with the decision of the CTT(A). 13. On identical circumstances, the Hon'ble High Court of Delhi in the case of Pr. CIT v. Sahara India Life Insurance Co. Ltd. [2019] 108 taxmann.com 597/2021] 432 ITR 84 (Delhi)/TTA No. 475 of 2019 order dated 02.08.2019 has, though in the context of penalty provisions u/s 271(1)(c), 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 ie. whether for concealment of particulars of inc me 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 of2016 by order dated 5th August, 2016." 14. When the notice u/s 270A is read with the decision of the Hon'ble High Court of Delhi [supra], in our considered opinion, the penalty will not survive. It would not be out of place to refer to the decision of the Hon'ble High Court of Delhi in the case of CIT v. Virgo Marketing (P) Ltd. [2008] 171 Taxmann 156 (Delhi) wherein the Hon'ble High Court held as under: "We are unable to discern from a reading of the assessment order why the Assessing Officer chose to initiate penalty proceedings against the assessed and under which part of Section 271(1)(c) of the Act. In other words, we are unable to discern from the assessment order the reason for initiating penalty proceedings. Therefore, the concurrent view held by both the authorities below must be accepted." 15. Further, the Hon'ble Supreme Court in the case of CIT v. SSA'S Emerald Meadows [2016] 73 taxmann.com 248/242 Taxman 180 (SC)/[2016] 8 TMI 1145, while confirming the Karnataka High Court order in CIT v. SSA'S Emerald Meadows [2016] 73 taxmann.com 241 (Karnataka)/[2015] (11) TMI 1620, has held that notice issued by the Assessing Officer u/s 274 r.w.s 271(1)(c) of the Act to be bad in law as it did not specify which limb of section 271(1)(c) of the Act the penalty proceedings

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had been initiated i.e. whether for concealment of particulars of income or furnishing of inaccurate particulars of income. 16. Considering the facts of the case in totality, in the light of judicial decisions referred to hereinabove, we uphold the findings of the Id. CIT(A) and direct the Assessing Officer to delete the penalty for all the three years. The grounds of appeal are dismissed.” 5. In view of the above material facts of non-specifying the violation in the notice by following judicial precedents, impugned orders dated 11.11.2025 of ld. CIT(A), dated 04.03.2024 of penalty order and Ld. AO being illegal, are set aside. Grounds of appeal are accepted.

6.

In the result, the appeal filed by the assessee is allowed.

Order pronounced in the open court on 27.07.2026

Sd/- Sd/- (MANISH AGARWAL) (VIMAL KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 27.07.2026 Binita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI

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