Loading judgment…
Facts
The assessee appealed against a penalty of Rs. 4,68,623/- levied under section 271(1)(c) of the Income-tax Act for Assessment Year 2014-15. The core contention was that the penalty show cause notice issued by the Assessing Officer did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars.
Held
The tribunal, relying on a jurisdictional High Court judgment (PCIT & Ors. V. M/s Sahara India Life Insurance Co. Ltd.), held that the failure of the show cause notice to explicitly state the specific limb of the offence (concealment or furnishing inaccurate particulars) vitiates the entire penalty proceedings. Consequently, the assessee's appeal was allowed.
Key Issues
Whether a penalty levied under Section 271(1)(c) is valid if the show cause notice fails to specify the exact ground (concealment of income or furnishing inaccurate particulars of income) for which the penalty is proposed.
Sections Cited
Section 271(1)(c) of the Income-tax Act, 1961
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH “SMC”: NEW DELHI
Before: SHRI SATBEER SINGH GODARA
O R D E R PER SATBEER SINGH GODARA, JM:
This assessee’s appeal for assessment year 2014-15 arises against National Faceless Appeal Centre (NFAC), Delhi’s DIN and order no. ITBA/NFAC/S/250/2022-23/1049285074(1), dated 31.10.2023, in case no. NFAC/2013-14/10119451, in proceedings u/s 271(1)(c) of the Income-tax Act, 1961, hereinafter referred to as the ‘Act’.
Heard both the parties at length. Case file perused.
Coming to the assessee’s sole substantive ground raised herein, challenging both the lower authorities’ action levying section 271(1)(c) penalty amounting to Rs. 4,68,623/-, it emerges at the outset from the learned Assessing Officer’s 23.12.2016 that he had nowhere stated the specific limb as to whether it is an instance of concealment or that of furnishing of inaccurate particulars thereof. This being the clinching fact emerging from the case file, the hon’ble jurisdictional high court in PCIT & Ors. V. M/s Sahara India Life Insurance Co. Ltd. 2019(8) TMI 409 (Delhi) has already settled the issue in taxpayer’s favour and against the department that such failure indeed vitiates the entire penalty proceedings. I, accordingly, accept the assessee’s sole substantive grievance in very terms.
All other pleadings on merits qua correctness of the impugned penalty stand rendered academic.
This assessee’s appeal is allowed in above terms.
Order pronounced in open court on 26.11.2024.