AMIT TANDON,MUMBAI vs. DCIT 24(1), MUMBAI

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ITA 2688/MUM/2013Status: DisposedITAT Mumbai19 April 2017AY 2006-073 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 271(1)(c) is invalid if the AO's notice does not specify under which limb of the section the penalty proceedings were initiated. Following the Supreme Court's decision in SSA's Emerald Meadows, the Tribunal found the penalty notice to be defective.

What were the facts?

The assessee, engaged in real estate and equipment hiring, declared an income of Rs. 40.18 lakhs. The AO determined the income at Rs. 1,17,26,300/- and levied a penalty of Rs. 24.14 lakhs under Section 271(1)(c) for furnishing inaccurate particulars of income. The CIT(A) confirmed the penalty.

What were the issues?

The key issue was the validity of the penalty levied under Section 271(1)(c) due to a defective show cause notice that did not specify the limb of the section under which the penalty was being imposed.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य सद�य राजे�� राजे�� केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा लेखा सद�य सद�य राजे�� राजे�� अनुसार अनुसार Challenging the order dated 27/02/2013, of the CIT (A)-34, Mumbai, the assessee has filed the present appeal.Assessee, an individual, engaged in the business of dealing in real estate, hiring of editing equipments and furniture/fixture, filed his return of income on 31/10/2006, declaring income of Rs. 40.18 lakhs. The Assessing Officer (AO) completed the assessment u/s. 143 (3) of the Act,on 22/12/2008, determining its income at Rs. 1, 17, 26, 300/-. 2.Along with the original grounds of appeal, the assessee has also filed additional ground of appeal and has requested to admit the same stating that ground was purely legal in nature and there was no need to make enquiry about the facts. It was further stated that the omission of the said ground in the original grounds was not wilful or unreasonable. During the course of hearing before us, the Authorised Representative (AR) made the sale submissions that are part of the application for admitting the additional evidences.The Departmental Representative (DR) left the issue of admitting additional evidence to the discretion of the bench. We find that the issue raised by the assessee is a question of law and does not involve investigation facts. Therefore, be admit the same. 3.Effective ground of appeal is about confirming the levy of penalty u/s. 271(1)(c), amounting two Rs. 24.14 lakhs.During the assessment proceedings, the AO had made certain additions/ disallowances to the total income of the assessee.The First Appellate Authority(FAA)dismissed

2688/M/13-Amit Tandon the appeal filed by him.The Tribunal confirmed the order of the FAA in the quantum proceedings.

4.Meanwhile,the AO issued a show cause notice to the assessee asking him as to why penalty u/s.271(1)(c) should not be levied for furnishing inaccurate particulars of income. After considering the submission of the assessee, dated 12/07/201, the AO held that the assessee had concealed the particulars of income. He levied a penalty of Rs. 24, 14, 800/-as per the provisions of section 271(1)(c). During the appellate proceedings, the FAA confirmed the penalty levied by the AO.

5.During the course of hearing before us, the AR stated that while issuing the notice for levying the penalty, the AO had not indicated as to under which limb of the section the assessee had committed the default i.e. whether it was for furnishing inaccurate particulars or for concealing the particulars of income.He referred to the notice issued by the AO,wherein both the limbs of the penalty notice was existing. He referred to the cases of SSA’S Emerald Meadows (242 Taxman 180) and Chandru K Mirchandani(ITA/5368/Mum/2014-AY.2009-10,dated 05/04/ 2017). The DR stated that matter could be decided on merits.

6.We find that the Hon’ble Apex Court in the case of SSA’S Emerald Meadows (supra) has held that if the penalty notice issued by the AO does not specify under which limb of the section 271(1)(c) of the Act penalty proceedings had been initiated,the penalty levied under the said section would not be valid.In the case under consideration the AO has not specified the limb under which penalty was leviable. Therefore,respectfully following the above judgment of the Hon’ble Supreme Court, we decide the additional ground of appeal in favour of the assessee and reverse the order of the FAA.

As a result,appeal filed by the assessee stands allowed. फलतःिनधा�रती �ारा दािखल क� गई अपील मंजूर क� जाती ह�. Order pronounced in the open court on 19th April, 2017. आदेश क� घोषणा खुले %यायालय म' (दनांक 19 अ)ैल , 2017 को क� गई । Sd/- Sd/- (राजे�� / Rajendra) (जोिग�दर�सह /JoginderSingh) सद�य / ACCOUNTANT MEMBER �याियक सद�य / JUDICIAL MEMBER लेखा लेखा सद�य लेखा लेखा सद�य सद�य मुंबई Mumbai; (दनांकDated : 19.04.2017. Jv.Sr.PS. आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 2

2688/M/13-Amit Tandon

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