ZOOM COMMUNICATION LTD.,NEW DELHI vs. ACIT CENTRAL CIRCLE- 17, NEW DELHI

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ITA 1649/DEL/2019Status: DisposedITAT Delhi04 June 2024AY 2011-12Bench: us and it comes up admittedly in the notice issued, there was no specific mention as to under which limb, specifically the notice is issued. At the same time as we peruse the assessment order it comes up that the AO after making the additions/disallowance, made an observation that for furnishing inaccurate particulars proceedings u/s 271(1)(c) are being initiated. In the light of the aforesaid, we convinced that the ambiguity in the charge vitiates the levy of penalty. The additional ground3 pages

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Facts

The Assessee appealed against a penalty levied under section 271(1)(c) of the Income Tax Act, 1961. The assessee contended that the notice issued for the penalty was ambiguous as the specific limb (concealment of income or furnishing inaccurate particulars) was not struck off, thereby vitiating the proceedings. The Ld. DR argued that the assessment order contained findings for both concealment and furnishing inaccurate particulars.

Held

The Tribunal found that the notice issued to the assessee indeed lacked specific mention of the limb under which the penalty was to be levied, leading to ambiguity. It held that this ambiguity in the charge vitiated the levy of penalty, and therefore, the appeal of the assessee was allowed, and the impugned penalty order was set aside.

Key Issues

Whether a penalty levied under section 271(1)(c) of the Income Tax Act, 1961, is valid if the penalty notice issued to the assessee is ambiguous regarding the specific limb (concealment of income or furnishing inaccurate particulars) under which the penalty is initiated.

Sections Cited

271(1)(c)

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Income Tax Appellate Tribunal, DELHI BENCH ‘F’: NEW DELHI

For Appellant: Shri Manju Sabharwal, Adv

For Respondent: Shri Vivek Vardhan, Sr. DR

Hearing: 21/03/2024Pronounced: 04/06/2024

ORDER PER ANUBHAV SHARMA, JM: This appeal of the Assessee arises out of the order of the Learned Commissioner of Income Tax (Appeals)-27, New Delhi

[hereinafter referred to as ‘Ld. CIT(A)’] in Appeal No.59/2018-19 dated 25/01/2019 against the order passed by Asst. Commissioner of Income Tax, Central Circle-17, New Delhi (hereinafter referred to as the ‘Ld. AO’) u/s 271(1)(c) of the Income Tax Act, 1961

(hereinafter referred to as ‘the Act’) on 31/03/2018.

Heard and perused the record.

At the time of hearing, the Ld. AR has preliminary argued on additional ground and submitted that as such assessee was issued notice for the purpose of section 271(1) (c) of the Act but the specific limb, as was applicable, was not struck off and thus being ambiguous the exercise of jurisdiction for the purpose of section 271(1)(c) to levy penalty is vitiated.

3.1 However, the Ld. DR has defended the order submitting that in the assessment there was both finding of concealment of income and of furnishing inaccurate particulars, therefore, on this ground, the proceedings cannot be vitiated.

We have given thoughtful consideration to the matter before us and it comes up admittedly in the notice issued, there was no specific mention as to under which limb, specifically the notice is issued. At the same time as we peruse the assessment order it comes up that the AO after making the additions/disallowance, made an observation that for furnishing inaccurate particulars proceedings u/s 271(1)(c) are being initiated. In the light of the aforesaid, we convinced that the ambiguity in the charge vitiates the levy of penalty. The additional ground thus raised is sustained. The appeal of the assessee is allowed. The impugned penalty order is set aside.