PR. COMMISSIONER OF INCOME TAX -CENTRAL -1 vs. CHETAN GUPTA

This appeal filed under Section 260A of the Income Tax Act, 1961 (the Act) challenges the order dated 28.06.2022 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No.896/Del/2015 in respect of the Assessment Year (AY) 2004-05, whereby the ITAT has allowed three appeals filed by the respondent/Assessee in respect of AY 2002-03 to AY 2004-05. 2. The ITAT in paragraphs 3 to 8 has held as under:- “3. The Assessing Officer made addition of Rs.xxxx/- to the total income on account of the unsecured loans received during the F.Y. 2003-04. Consequent to the Signed By:PRADEEP SHARMA Signing Date:20.12.2025 10:46:48 Signature Not Verified

We find that the page no. 10 below para 8.1, the Assessing Officer has also mentioned “that penalty proceedings u/s 271(1)(c)are being initiated separately.” 5. We find that the para no . 1 of the penalty order reads as under: “Penalty proceedings u/s 271(1)(c) of I .T . Act was initiated separately for concealment and failing to furnish true particulars o fits income. Show cause notice initiating penalty u/s 271(1)(c) of the Act was issued and send alongwith assessment order on 23.12.2011.”

We also find that the para no . 11 of the penalty order reads as under:“I hold the assessee in de fault in concealing the income of Rs.xxxxx.” 7. On this issue, we are guided by the following judgments: 1) Karnataka High Court: CIT vs. Manjunatha Cotton and Ginning Factory: 359 ITR 565 held that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income or for furnishing o f incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy requirement of law. .2) Bombay High Court: Mr . Mohd. Farhan A. Shaikh Vs ACIT Section 271(1)(c): Penalty- Concealment-Non-striking off of the irrelevant part while issuing notice u/s 271(1)(c) of the Income Tax Act, order is bad in law. Assessee must be informed of the ground of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. 3) The Hon’ble jurisdictional Delhi High Court Signed By:PRADEEP SHARMA Signing Date:20.12.2025 10:46:48 Signature Not Verified

At the outset, Mr Ruchir Bhatia, learned SSC appearing for the appellant/Revenue states that this appeal is confined to the AY 2004-05 and he has no instructions with regard to the appeals pertaining to AY 2002-03 and AY 2003-04. 4. The issue which arose for the consideration of the ITAT was primarily, whether the penalty proceedings under Section 271 (1) (c) of the Act could be initiated without specifying clearly as to whether the same are being initiated for concealing the income by the assessee or furnishing inaccurate particulars of such income. 5. Mr Bhatia by drawing our attention to the page 40 of the paperbook submit that as there is specific finding of the Assessing Officer (AO) in paragraph 12 of the assessment order dated 23.12.2011, that the AO is satisfied that the respondent/Assessee has concealed his income with regard to the addition made, in that sense, it is apparent that the notice for penalty under Section 271 (1)(c) of the Act was issued primarily for that reason. Signed By:PRADEEP SHARMA Signing Date:20.12.2025 10:46:48 Signature Not Verified

On the last date of hearing, Mr Bhatia sought time to place before this Court the copy of notice which was issued to the respondent/Assessee on 28.12.2011 under Section 271 (1) (c) of the Act. Today, he has produced the copy of notice dated 28.12.2011 and same reads as under:- “NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 U/S 271AAA/271(1)(C) Asstt. Commissioner of Income Tax Central Circle-2, New Delhi

A perusal thereof would reveal that notice was not confined to the ground that the respondent/Assessee has concealed the income with respect to the addition made. It also incorporate ‘or furnished inaccurate particulars of such income”. In other words, the notice does not state the specific ground on which notice has been issued nor a tick (✓) has been put on the specific ground on which the notice was required to be issued. If that be so, the ITAT is justified in relying upon the judgments as referred to in paragraph 7 of the impugned order, which we have reproduced above. 8. Hence, we are of the view, as no substantial question of law arises for consideration in this appeal, the appeal need to be dismissed. It is ordered accordingly. 9. Additionally, we find this appeal is accompanied with an application seeking condonation of delay of 1100 days in re-filing. Upon going through the averments made in the application, no justifiable ground has been raised to condone the delay of 1100 days. The appeal is dismissed on this ground as well.