OM ISPAT,NAGPUR vs. ITO WARD 4(3), NAGPUR

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ITA 519/NAG/2025Status: DisposedITAT Nagpur15 June 2026AY 2015-164 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that penalty proceedings require a clear accusation, and it is necessary to specify whether the penalty is for concealment of income or furnishing inaccurate particulars. Since this was not clearly done, the penalty order was quashed.

What were the facts?

The assessee challenged a penalty order under Section 271(1)(c) of the Income Tax Act. The primary ground for appeal was that the penalty proceedings were not clearly specified as to which limb of the section they were initiated and concluded under.

What were the issues?

Whether penalty proceedings under Section 271(1)(c) are valid if the specific limb (concealment or inaccurate particulars) is not clearly specified in the show-cause notice and the penalty order.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 250

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, NAGPUR BENCH :: NAGPUR

For Appellant: Shri Himesh Demble, CA
For Respondent: Shri Surjit Kumar Saha, Sr.DR
Hearing: 12.06.2026Pronounced: 15.06.2026

PER ANUBHAV SHARMA, JM

This appeal filed by the assessee is directed against the order of National Faceless Appeal Centre, Delhi, (for short, “CIT(A)”), dated 01/08/2025 passed under section 250 of the Income Tax Act, 1961 (for short, “Act”) which is emanating from the penalty order dated 29.05.2018

ITA No. 519/NAG/2025 (OM Ispat) passed u/s. 271(1)(c) of the Act by the ITO, Ward-4(3), Nagpur, for the Assessment Year (AY) 2015-16.

2.

On hearing both the sides, we find that assessee has challenged the impugned penalty order primarily raising a ground that penalty proceedings have been conducted without clearly specifying the limb under which penalty proceedings were initiated and concluded.

2.1 Though, Ld.DR heavily relied the impugned order and submitted that penalty proceedings were initiated and conducted on both the counts.

3.

However, as we appreciate the material on record, we find that at page Nos. 9-11, assessee has provided copy of impugned assessment order which led to initiation of penalty proceedings and therein Ld. AO has mentioned that penalty proceedings u/s. 271(1)(c) of the Act are initiated for concealment of particular of income. Thereafter, at page No. 13 of the paper book, there is a copy of notice issued u/s. 274 r.w.s. 271(1)(c) of the Act, wherein Ld. AO had show-caused the assessee alleging

ITA No. 519/NAG/2025 (OM Ispat) that “you have concealed the particulars of income and furnished inaccurate particulars of such income”. As we go through the impugned order of levy of penalty, Ld. AO mentioned that penalty is being levied for furnishing inaccurate particulars of income, thereby concealing the income.

4.

We are of the considered view that law is now settled that penalty proceedings require crystal clear accusation and for that reason it is necessary to specify as to which limb of section 271(1)(c) of the Act, penalty proceedings have been initiated i.e. whether for concealment of particulars of income or furnishing inaccurate particulars of income. The reliance for this settled proposition can be laid on catena of decisions which were cited by the learned counsel for the assessee including the decision of Coordinate Delhi Benches in the case of Trendz Informatics Pvt. Ltd. vs. ITO in ITA No. 74/DEL/2020, dated 12.10.2022, wherein SLPO was dismissed.

ITA No. 519/NAG/2025 (OM Ispat) 5. In the light of aforesaid, we are inclined to sustain the ground No.3. Appeal of the assessee is allowed and the impugned penalty order is quashed.

Order pronounced in open Court on 15.06.2026

sd/- sd/- ANUBHAV SHARMA KHETTRA MOHAN ROY ACCOUNTANT MEMBER JUDICIAL MEMBER

Nagpur: Dated: 15/06/2026 vr/- Copy to: 1. The Assessee 2. The Revenue 3. The Pr.CIT concerned. 4. The DR, ITAT, Nagpur 5. Guard file. By order Vukkem Digitally signed by Vukkem Rambabu Rambabu Date: 2026.06.15 18:07:47 +05'30' Senior Private Secretary ITAT, Nagpur

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