SHRING CONSTRUCTION COMPANY PVT. LTD.,DEHRADUN vs. DCIT, CIRCLE-2, MUZAFFARNAGAR

ITA 7056/DEL/2018Status: DisposedITAT Delhi19 December 2025AY 2011-12Bench: SHRI MAHAVIR SINGH, HON'BLE (Vice President), SHRI BRAJESH KUMAR SINGH, HON'BLE (Accountant Member)9 pages
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What did the Tribunal hold?

The Income Tax Appellate Tribunal held that the penalty imposed under Section 271(1)(c) was not sustainable. This was because the show cause notice issued under Section 274 read with Section 271(1)(c) was ambiguous, failing to specify whether the penalty was for concealment of income or furnishing inaccurate particulars. The Tribunal also noted that no satisfaction was recorded by the Assessing Officer in the show cause notice, rendering the entire penalty proceedings vitiated and bad in law, relying on Supreme Court and High Court precedents.

What were the facts?

The assessee, Shring Construction Company Pvt. Ltd., engaged in Hydro Power Projects, filed its ITR for AY 2011-12. The Assessing Officer completed assessment under Section 143(3), making additions related to long-term capital gain, unverified share application money, unverifiable expenses, and non-deposit of employee PF contributions. Subsequently, a penalty of Rs. 2,01,39,072/- was imposed under Section 271(1)(c) for these additions, which was later confirmed by the CIT(A).

What were the issues?

Whether a penalty imposed under Section 271(1)(c) is valid when the show cause notice issued under Section 274 is ambiguous, does not specify the exact charge (concealment of particulars or furnishing inaccurate particulars), and lacks recorded satisfaction by the Assessing Officer.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274,Section 143(3)

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Before: SHRI MAHAVIR SINGH, HON’BLE & SHRI BRAJESH KUMAR SINGH, HON’BLE

For Respondent: Ms. Harpreet Kaur Hansra, Sr. DR
Hearing: 23.09.2025Pronounced: 19.12.2025

PER MAHAVIR SINGH, VP:

This appeal by the assessee is emanating from the order of the Ld. Commissioner of Income Tax (Appeals), Muzaffarnagar in Appeal No. 4000- 1992-170-218 dated 28.08.2018 on the following solitary ground:-

“That the notice issued u/s. 271(1)(c) and order imposing penalty of Rs. 2,01,39,072/- by the AO under the said section are illegal, bad in law, and without juri iction as Assessing Officer

has not mentioned in notice u/s 271(1)(c) under which violation he has issued notice.”

2.

The brief facts of the case are that the assessee is a company derives

income from Hydro Power Projects consisting of Power House. Th

The order continues below.

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