RUPINDER KAUR,NEW DELHI vs. DCIT CENTRAL CIRCLE-30, NEW DELHI

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ITA 2002/DEL/2023Status: DisposedITAT Delhi19 February 2024AY 2012-13Bench: SHRI SHAMIM YAHYA (Accountant Member)5 pages

AI SummaryAllowed

Facts

The assessee, Rupinder Kaur, appealed against a penalty of Rs. 15,22,861/- imposed under section 271(1)(c) of the Income-tax Act, 1961, for the assessment year 2012-13, which was confirmed by the CIT(A). The penalty was related to an accommodation entry of Rs. 51,00,000/- in her name, linked to her husband's case before the Income Tax Settlement Commission (ITSC). The Tribunal condoned a 114-day delay in filing the appeal, noting it was filed within the statutory period after the ITSC order in the husband's case was passed.

Held

The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was defective. It was an 'omnibus' notice that failed to specifically indicate whether the penalty proceedings were for 'concealment of particulars of income' or 'furnishing inaccurate particulars of income'. Following precedents from the jurisdictional High Court (PCIT vs. Sahara India Life Insurance Co. Ltd.) and Bombay High Court (Mr. Mohd. Farhan A. Shaikh vs. ACIT), the Tribunal concluded that such a vague notice is a fatal defect, rendering the penalty order invalid. The penalty was therefore directed to be deleted.

Key Issues

Whether a penalty notice issued under Section 274 read with Section 271(1)(c) of the Income Tax Act, which is an omnibus notice and does not specifically strike off the irrelevant charge, renders the subsequent penalty order invalid.

Sections Cited

Section 271(1)(c), Section 274, Section 142(1), Section 143(2)

AI-generated summary — verify with the full judgment below

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

For Appellant: Shri Lalit Mohan, CA, Shri Parth Singhal, Advocate

For Respondent: Shri Om Prakash, Sr. DR

Hearing: 14.02.2024

This appeal by the assessee is directed against the order of the ld. CIT (Appeals)-30, New Delhi dated 18.01.2023 for the assessment year 2012-13 confirming the penalty under section 271(1)(c) of the Income-tax Act, 1961 (for short ‘the Act’) amounting to Rs.15,22,861/-..

At the outset, it is noted that there is a delay of 114 days in filing the appeal before the ITAT. For the reasonable cause for filing the delayed appeal, ld. Counsel for the assessee submitted that ld. CIT (A) has passed the penalty order with the direction that the decision on penalty u/s 271(1)(c) is assessee’s husband before the Income Tax Settlement Commission (ITSC) owning the amount of Rs.51,00,000/- taken in the name of assessee as accommodation entry. It has been submitted by the ld. Counsel for the assessee that ITSC passed the order in the case of assessee’s husband on 23.06.2023 and subsequent to the aforesaid order, the instant appeal was filed on 11.07.2023 which is within the statutory time period provided under the Act.

Upon hearing both the parties and perusing the records, the delay in filing the appeal before the Tribunal is condoned.

Although assessee has raised various grounds, at the outset, ld. Counsel of the assessee contended that the notice issued under section 274 read with section 271(1)(c) of the Act is a defective one. The charge has not been specified in the notice, hence referring to various decisions including that of Hon’ble jurisdictional High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. 432 ITR 84 (Del.), ld. Counsel for the assessee pleaded that the penalty order is liable to be quashed.