SUMANTO PAUL,DELHI vs. THE ASSESSING OFFICER , INCOME TAX DEPARTMENT

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ITA 8755/DEL/2025Status: DisposedITAT Delhi11 March 2026AY 2016-17Bench: us that the show cause notice for penalty under Section 271(1)(c) of the Act dated 10.01.2024 for the year under consideration though issued, no notice has been issued alleging either concealment of income or furnishing inaccurate particulars of income made by the assessee which is mandatory failing which the entire proceedings is vitiated and, thus, liable to be quashed as was the argument advanced by the Ld. Counsel for the assessee before us which is found to be acceptable. Further, no s3 pages

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Facts

The assessee challenged a penalty imposed under Section 271(1)(c) for Assessment Year 2016-17, which originated from an assessment under Section 147. The Ld. CIT(A) had previously dismissed the assessee's appeal on grounds of limitation.

Held

The Income Tax Appellate Tribunal held that the penalty levied under Section 271(1)(c) was bad in law and void ab initio because the Assessing Officer failed to issue a mandatory notice specifically alleging concealment of income or furnishing inaccurate particulars. Consequently, the penalty proceedings were quashed.

Key Issues

The key issue was the validity of penalty proceedings under Section 271(1)(c) of the Income Tax Act when the Assessing Officer failed to issue a mandatory show cause notice specifically alleging concealment of income or furnishing inaccurate particulars.

Sections Cited

271(1)(c), 250, 147, 144B

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Income Tax Appellate Tribunal, DELHI BENCHES : A : NEW DELHI

Before: Ms. MADHUMITA ROY

For Appellant: Ms Shruti Gupta, Advocate &, Shri Punit Bhatia, Advocate

For Respondent: Shri Nitin Kumar Jaiman, Sr. DR

Hearing: 05.03.2026Pronounced: 11.03.2026

(Appellant) (Respondent) Assessee by : Ms Shruti Gupta, Advocate & Shri Punit Bhatia, Advocate Revenue by : Shri Nitin Kumar Jaiman, Sr. DR Date of Hearing : 05.03.2026 Date of Pronouncement : 11.03.2026 ORDER PER MADHUMITA ROY, JM:

The instant appeal filed by the assessee is directed against the order dated 13.11.2025 of the ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the penalty order dated 21.03.2024 passed by the National Faceless Assessment Centre (hereinafter referred to as ‘the ld. AO’) under Section 271(1)(c) of the Act for Assessment Year 2016-17.

The assessee has come up in appeal against the impugned order under Section 271(1)(c) of the Act which was initiated separately as claimed to have been done by the Ld. AO for concealment of its income as it appears from the assessment order dated 22.05.2023 under Section 147 r.w.s 144B of the Act. The Ld. AO finalized the penalty by passing orders as follows:- 1. Total amount of addition on which Rs.26,59,125/- penalty u/s 271(1)(c) is leviable 2. Tax on addition with surcharge Rs.16,43,340/- 3. Minimum penalty u/s 271(1)(c) @ 100% Rs.16,43,340/- of tax sought to be evaded 4. Maximum Penalty u/s 271(1)(c) @ 300% Rs.49,30,018/- of tax sought to be evaded 5. Penalty levied to be livable Rs.16,43,340/-

The Ld. CIT(A) dismissed the appeal preferred by the assessee as barred by limitation since the assessee failed to justify the delay of 219 days by specifying any sufficient cause; the explanation so offered by the assessee is found to be general, non-specific and unsupported by evidence as per the observations of the Ld.CIT(A).