SANJEEV KUMAR KHATRI,NEW DELHI vs. ITO, WARD- 2(3), FARIDABAD

Learned Counsel for the Assessee, at the outset, submitted that the A.O. issued show cause notice before

I have considered the rival submissions. In this case, the A.O. issued show cause notice Dated 30/31.03.2015 before levy of the penalty under section 271(1)(c) of the I.T. Act, 1961. From the perusal of the show cause notice Dated 30/31.03.2015, it is clear that the show cause notice issued by the A.O. for levy of the penalty under section 271(1)(c) of the Act to be bad in law as it did not specify in which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. The entire penalty proceedings are, therefore, vitiated and no penalty is leviable. On this score itself, similar view is taken by Hon’ble Karnataka High Court in the case of CIT vs. M/s. SSAs Emerald Meadows 73 taxmann.com 241 and this decision is 4 ITA.No.307/Del./2019 Mr. Sanjeev Kumar Khatri, New Delhi. confirmed by the Hon’ble Supreme Court reported in 73 taxmann.com 248. On similar set of facts, the ITAT, Delhi Benches are taking a consistent view that in such circumstances, levy of penalty is invalid. Since the show cause notice is invalid due to the above reason and as such the entire penalty proceedings are vitiated. Thus, no penalty is leviable against the assessee. The decisions relied upon by the Ld. D.R. would not support the case of the Revenue, In view of the above, I set aside the Orders of the authorities below and cancel the penalty.

In the result, appeal of assessee allowed.