SANJAY JAIN,SAHARANPUR vs. INCOME TAX OFFICER, WARD-3(3)(1),, SAHARANPUR

ITA 6650/DEL/2025Status: DisposedITAT Delhi13 March 2026AY 2013-14Bench: SH. S. RIFAUR RAHMAN, ACCOUNTANT MEMBER AND SH. SUDHIR KUMAR (Judicial Member)1 pages
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What did the Tribunal hold?

The Tribunal found that the penalty notice issued under Section 271(1)(c) did not specify which limb (concealment or furnishing inaccurate particulars) was invoked and did not strike off the inapplicable portion. Following the ratio of the judgment in CIT v. SSA's Emerald Meadows, the Tribunal quashed the penalty order.

What were the facts?

The Assessing Officer (AO) imposed a penalty of Rs. 16,28,424/- on the assessee under Section 271(1)(c) for debiting huge expenses not supported by proper evidence. The assessee's explanation was rejected, and books of accounts were rejected under Section 145(3), with a net profit rate applied. The NFAC upheld the penalty, and the assessee appealed to the tribunal.

What were the issues?

Whether the penalty under Section 271(1)(c) is valid when the notice issued under Section 274 does not specify which limb of Section 271(1)(c) is invoked and the inapplicable portion is not struck off.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 145(3)

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Income Tax Appellate Tribunal, DELHI BENCH ‘B’, NEW DELHI

Before: SH. S. RIFAUR RAHMAN & SH. SUDHIR KUMAR

For Respondent: Shri Rajesh Kumar Dhanesta, Sr. DR
Hearing: 25/02/2026Pronounced: 13/03/2026

PER SUDHIR KUMAR, JM: This appeal by the assessee is directed against the order of Ld. National Faceless Appeal Centre (NFAC), Delhi dated 13.08.2025 pertaining to A.Y. 2013-14 and arises out of the penalty order dated 12-03-2018 passed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’].

2.

The assessee has raised the following grounds of appeal :

1.

That, the notice issued u/s. 271(1)(c) and order imposing penalty of Rs. 16,28,424/- under said section are illegal, bad in law and without juri iction. The NFAC has also erred in confirming the same.

2.

That, the NFAC has failed to appreciate, that, the notice issued u/s. 271(1)(c) is illegal,

The order continues below.

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