RAJMATA JIJABAI CO.OP.HSG. SOC. LTD.,MUMBAI vs. ITO WARAD 15 (1)(3) NOW ITO WARD 26 (2)(5), MUMBAI

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ITA 6694/MUM/2019Status: DisposedITAT Mumbai26 July 2021AY 2007-084 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty notice issued under section 274 read with section 271(1)(c) was invalid as it did not strike off inappropriate words, making it vague. This issue is covered by the Bombay High Court's decision in Mohd. Farhan A. Shaikh.

What were the facts?

The assessee's appeal concerns a penalty levied under section 271(1)(c) for the assessment year 2007-08. The penalty was confirmed by the CIT(A) despite the assessee raising additional grounds challenging the validity of the penalty proceedings.

What were the issues?

The primary issue was the validity of the penalty proceedings due to a vague and omnibus notice issued under section 274 read with section 271(1)(c).

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI

Before: SHRI MAHAVIR SINGH, VP & SHRI S. RIFAUR RAHMAN, AM

For Appellant: Shri M. Subramanian, AR
Hearing: 26.07.2021Pronounced: 26.07.2021

O R D E R भहावीय स िंह, उऩाध्मक्ष के द्वाया / PER MAHAVIR SINGH, VP: This appeal of the assessee is arising out of order of the Commissioner of Income Tax (Appeals)]-38, Mumbai [in short CIT(A)], in Appeal No. CIT(A)-38/ITO.15(1)(3)/IT.10814/2014-15 vide dated 24.07.2019. The Assessment was framed by the Income

1.

2. The only issue in this appeal of assessee is against the order of CIT(A) confirming the action of the Assessing Officer in levying the penalty under section 271(1)(c) of the Act. For this, assessee has raised the following ground No.1:-

“1. On the facts and in the circumstances of the case and in law the law, the learned Commissioner of Income Tax (Appeals) erred in passing the appeal order on statistical purposes for penalty Rs. 3,98,810/-.”

3.

At the outset, it is to be noticed that the assessee has now raised the additional ground that the penalty proceedings initiated are invalid and bad in law and for this, following three grounds are raised: -

“1. On the facts and in the circumstances of the case & in law, the penalty proceedings initiated vide notice u/s. 271 read with section 274 dated 27-12-2010 is invalid and bad in law.

2.

On the facts and in the circumstances of the case and in law, the penalty order dated 26-03-2014 levying a

3. On the facts and in the circumstance of the ease and in law, the learned C.I.T.(Appeals) erred in dismissing the appeal and thereby confirming the penalty levied of Rs.3,98,810/- u/s 271(i)(c) of the act.”

4.

We noted that this is a jurisdictional issue raised by assessee and in term of the decision of Hon’ble Supreme Court in the case of National Thermal Power Co. Ltd. V. CIT 229 ITR 383 (SC), we admit the ground and will adjudicate.

5.

We have also gone through the notice issued under section 274 read with Section 271(1)(c) of the Act issued by ITO, Ward 15(1)(3), Mumbai dated 27.12.2010 and there is no striking off of inappropriate words or paragraphs, whether the penalty is initiated for concealing the particulars of income or for furnishing of inaccurate particulars of such income. We noted that this issue is now covered by the decision of Hon’ble Bombay High court Mohd. Farhan A. Shaikh V. ACIT (2021) 434 ITR 1 (Bom), wherein it is held that the assessee must be informed of the grounds of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. CIT v. Kaushalya (Smt ) (1995] 216 ITR 660 (Bom)(HC) distinguished Ventura Textiles Ltd. v. CIT [2020] 426 ITR 478 (Bom)(HC) distinguished. Dilip N. Shroff v. JCIT [2007] 291 ITR 519 (SC) followed. As the issue is covered by the decision Bombay

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