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Income Tax Appellate Tribunal, DELHI BENCHES “A”: DELHI
Before: SHRI BHAVNESH SAINI & SHRI ANIL CHATURVEDI
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES “A”: DELHI BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI ANIL CHATURVEDI, ACCOUNTANT MEMBER ITA.No.4525/Del./2017 Assessment Year 2006-2007 Dr. Ashok Mohan Dwarkadas, Legal Heir of Late Dr. Mrs.) Nirmala The Income Tax Officer, Dwarka Dass, New Delhi PIN 110029. PAN AFZPD6970J vs., Ward-45(4), C/o. RAJ KUMAR & ASSOCIATES, C.As., New Delhi. L-7A(LGF), South Ext. Part-2, New Delhi – 049. (Appellant) (Respondent) For Assessee : Shri Aman Gupta, C.A. For Revenue : Mrs. Alka Gautam, Sr. D.R. Date of Hearing : 25.01.2021 Date of Pronouncement : 02.02.2021 ORDER PER BHAVNESH SAINI, J.M.
This appeal by Assessee has been directed against the Order of the Ld. CIT(A)-36, New Delhi, Dated 08.05.2017, for the A.Y. 2006-2007, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961.
2 ITA.No.4525/Del./2017 Shri Ashok Mohan Dwarkadas, New Delhi.
Briefly the facts of the case are that return of income was filed on 28.03.2007 declaring income of Rs.1,16,639/-. The A.O. completed the assessment under section 143(3) of the I.T. Act, 1961, Dated 31.12.2008 making additions on account of short term and long term capital gains. The A.O. initiated the penalty proceedings under section 271(1)(c) of the I.T. Act for furnishing inaccurate particulars of income and concealment of income. The A.O. vide separate Order levied the penalty under section 271(1)(c) of the I.T. Act for concealing the particulars of income. The Ld. CIT(A) dismissed the appeal of assessee, in absence of assessee.
Learned Counsel for the Assessee submitted that A.O. issued show cause notice Dated 31.12.2008 to the Legal Heir of the Assessee in which A.O. has mentioned as under :
“Have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of Explanation 1, 2, 3, 4 and 5.”
3 ITA.No.4525/Del./2017 Shri Ashok Mohan Dwarkadas, New Delhi. 3.1. He has submitted that A.O. has not specified as to for which limb penalty proceedings have been initiated whether for concealment of particulars of income or furnishing inaccurate particulars of income. Therefore, levy of the penalty is illegal and bad in Law.
On the other hand, Ld. D.R. relied upon the Orders of the authorities below.
We have considered the rival submissions. The A.O. while making the additions on account of short term / long term capital gains initiated the penalty proceedings under section 271(1)(c) of the I.T. Act for furnishing inaccurate particulars of income and concealing the facts. The A.O, however, levied the penalty under section 271(1)(c) of the I.T. Act for concealing the particulars of income. The A.O. in the show cause notice issued for levy of penalty has mentioned “Have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of Explanation 1, 2, 3, 4 and 5.” It would, therefore, show that notice issued before levy of the penalty is bad in Law and it did not specify under which limb of Section 271(1)(c) of the 4 ITA.No.4525/Del./2017 Shri Ashok Mohan Dwarkadas, New Delhi. Act, penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. In the case of CIT vs., M/s. SSA’s Emérald Meadows reported in 73 taxmann.com 241 (Kar.) (HC), the Hon’ble Karnataka High Court dismissed the appeal of the Revenue upholding the view of the Tribunal in cancelling the penalty in the similar circumstances. The Judgment of Hon’ble Karnataka High Court in the case of M/s. SSA’s Emerald Meadows (supra) have been affirmed by the Hon’ble Supreme Court by dismissing the SLP of the Revenue reported in 73 taxmann.com 248 (SC). The Hon’ble Delhi High Court in its recent decision in the case of Pr. CIT vs. M/s. Sahara India Life Insurance Company Ltd., 2019 (8) TMI 409 (Del.) vide Judgment Dated 02.08.2019 in paras 21 and 22 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
5 ITA.No.4525/Del./2017 Shri Ashok Mohan Dwarkadas, New Delhi. & 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.
On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.”
5.1. In view of the above discussion, it is clear that levy of the penalty is bad in Law and liable to be quashed because when illegal notice have been issued before levy of the penalty, this would vitiate the entire penalty proceedings. We, accordingly, set aside the Orders of the 6 ITA.No.4525/Del./2017 Shri Ashok Mohan Dwarkadas, New Delhi. authorities below and cancel the penalty. Accordingly, appeal of the assessee is allowed.
In the result, appeal of Assessee allowed.
Order pronounced in the open Court.