M/S PARAS LUBRICANTS LTD.,NEW DELHI vs. DCIT, NEW DELHI

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ITA 605/DEL/2017Status: DisposedITAT Delhi31 October 2019AY 2012-135 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 notice issued by the Assessing Officer was bad in law as it did not specify whether the penalty was for concealment of income or for furnishing inaccurate particulars. The Tribunal followed the decision of the Delhi High Court on this issue.

What were the facts?

The assessee challenged the penalty imposed under Section 271(1)(c) of the Income Tax Act. The primary ground for challenge was that the Assessing Officer issued a pre-printed notice without specifying under which limb of the section the penalty was leviable.

What were the issues?

Whether a penalty notice under Section 271(1)(c) is invalid if it does not specify the limb of the section under which the penalty is initiated.

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(2)Show list

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Income Tax Appellate Tribunal, DELHI ‘F’ BENCH,

Before: SHRI N.K. BILLAIYA, & MS. SUCHITRA KAMBLE

For Respondent: Shri Surendra Pal, Sr. DR
Hearing: 30.10.2019Pronounced: 31.10.2019

PER N.K. BILLAIYA, ACCOUNTANT MEMBER,

1.

This appeal by the assessee is preferred against the order of the Commissioner of Income Tax [Appeals] 12, New Delhi dated 30.11.2016 pertaining to assessment year 2012-13.

2.

The sum and substance of the grievance of the assessee is that the ld. CIT(A) erred in upholding the action of the Assessing Officer in imposing penalty u/s 271(1)(c) of the Income tax Act, 1961 [hereinafter referred to as 'The Act' for short]. The assessee has also challenged the levy of penalty on the ground that the Assessing Officer has issued a pre-printed notice u/s 271(1)(c) of the Act r.w.s 274 without specifying under which limb the penalty is leviable.

3.

None appeared on behalf of the assessee. However, an application for adjournment was filed. The adjournment is denied and we have decided to proceed exparte.

4.

Notice u/s 274 r.w.s 271 of the Act is exhibited at page 24 of the appeal set. A perusal of the said notice clearly shows that the Assessing Officer has not specified under which limb of the section the penalty is leviable.

5.

This issue is squarely covered in favour of the assessee and against the Revenue by the order of the Hon'ble High Court of Delhi in a bunch of appeals in 426, 427 and 429 of 2019 vide order dated 2.8.2019. The relevant findings of the Hon'ble High Court read 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 & 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 STP No.11485 of 2016 by order dated 5th August, 2016.

22.

On this issue again this Court is unable to find any error having been committed by the ITAT. No substantial question of law arises.”

6.

Finding parity on the facts of the case with the aforesaid decision, respectfully following the findings of the Hon'ble High Court [supra] in the light of facts relating to levy of penalty, as mentioned elsewhere, we direct the Assessing Officer to delete the penalty so levied.

7.

In the result, the appeal of the assessee in is allowed.

The order is pronounced in the open court on 31.10.2019.

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