BALBIR SINGH (HUF),CHANDIGARH vs. DCIT, C-1(1), CHANDIGARH

आदेश/ORDER Per Annapurna Gupta, Accountant Member: This appeal has been preferred by the assessee against the order of the Commissioner of Income Tax (Appeals)-I, Chandigarh [(in short ‘CIT(A)’] dated 29.9.2017 relating to assessment year 2004-05, upholding penalty levied u/s

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271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to

as ‘Act’).

No.1 before us, which reads as under:

“1. That the Ld. CIT-(A), has grossly erred in upholding the penalty levied by the AO which itself has been levied on the basis of illegal show cause notice issued u/s 274 r.w.s. 271(l)(c) as it did not specify on which limb of section 271(l)(c) of the Act, the penalty proceedings had been initiated, i.e., whether the concealment of particulars of income or furnishing of inaccurate particulars of income.” 3. It was pointed out that this ground had been raised

before us for the first time and was a legal ground

challenging the validity of the order passed imposing

penalty u/s 271(1)(c) of the Act. Ld.Counsel for the assessee

pleaded admittance of the same before us, contending that

all relevant facts for adjudicating the ground were already

on record and no new /fresh facts were required to be

brought on record and being a legal ground challenging the

validity of the order passed , the same ought to be

admitted.Reliance was placed on the decision of the apex

court in the case of National Thermal Power Co. Ltd. vs

Commissioner of Income Tax 229 ITR 383 (SC)

The Ld. DR objected to the admission of the same.

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the assessee. Undeniably the present ground, is a legal

ground, challenging the levy of penalty basis an illegality in

the notice issued by the department for initiating penalty

proceedings. It effects the very foundation/ basis of levy of

penalty and can be adjudicated on the basis of facts on

record since it refers to illegality in the notice issued by

the department which is part of its record. As per the

decision of the Hon’ble Apex court in the case of National

Thermal Power Co. Ltd.(supra) the Tribunal is well within its

powers to admit such additional grounds not raised earlier.

The said ground was accordingly admitted for hearing and

the objection of the Ld. DR overruled.

issue, the Ld.Counsel for the assessee contended, that the

validity of the order has been challenged on the ground that

the notice issued for levy of penalty was illegal since it did

not specify the act of the assessee for which penalty was

levied, whether for concealment of particulars of income or

for furnishing of inaccurate particulars of income. The

Ld.Counsel for the assessee drew our attention to a copy of

the notice issued u/s 274 of the Act in the present case

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placed at Paper Book page No.2 to point out the aforesaid

fact. The Ld.Counsel for the assessee further relied upon

various decisions of the Tribunal and the Hon'ble High

Court and Hon'ble Apex Court, in support of its contention

that in view of the illegality in the notice issued ,the penalty

order passed was bad in law. The case laws referred to

before us by way of filing copies of the same in the form of

a paper book, are as under:

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issue was not raised before the Ld.CIT(A),it would be

appropriate to restore the matter back to the CIT(A) to verify

the contentions of the assessee and thereafter adjudicate

the issue in accordance with law. The Ld. DR also pointed

out that the Hon'ble Madras High Court had ruled in favour

of the Revenue on this issue in the case of Sundram Finance

Ltd. vs Assisstant commissioner of Income Tax in TC Appeal

No. 876 and 877 of 2008 dated 23-04-2018.

The Ld.Counsel for the assessee did not object to the

same.

has raised a legal ground before us for the first time,

challenging the validity of the order passed levying penalty,

referring to illegality in the notice issued for initiating the

proceedings to levy penalty by the AO, we consider it fit to

restore the matter back to the CIT(A) to verify the contention

of the assessee and thereafter adjudicate the issue in

accordance with law after taking note of the various

decisions citied by both the parties.

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Order pronounced in the Open Court.

Sd/- Sd/- �दवा �संह अ�नपूणा� गु�ता (ANNAPURNA GUPTA) (DIVA SINGH) �याय�क सद�य/Judicial Member लेखा सद�य/Accountant Member �दनांक /Dated: 20th August, 2019 *रती* आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar