BODHSONS INVESTMENT & FINANCE PVT. LTD.,NEW DELHI vs. ITO, NEW DELHI

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ITA 5931/DEL/2013Status: DisposedITAT Delhi30 May 2016AY 2000-014 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 notice under Section 271(1)(c) was bad in law as it did not specify the grounds for penalty, violating principles of natural justice. Therefore, the penalty could not be imposed.

What were the facts?

The assessee's appeal was against a penalty order confirmed by the CIT(A) for AY 2000-01. The assessee argued that the penalty notice under Section 271(1)(c) lacked a specific charge and that the reopening of assessment was invalid.

What were the issues?

Whether a penalty under Section 271(1)(c) can be levied when the notice issued under Section 274 does not contain a specific charge, and whether the reopening of assessment was valid.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(1)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘A’, NEW DELHI

Before: SHRI I.C.SUDHIR & SHRI J. SUDHAKAR REDDY

For Appellant: Adv. And Sh.Shailesh Gupta, C.A

ORDER

PER J. SUDHAKAR REDDY, ACCOUNTANT MEMBER

1.

This is an appeal filed by the Assessee directed against the order dated 6.9.2013 of Ld.CIT(A)-VI, New Delhi pertaining to the Assessment Year (hereinafter referred to as the A.Y.) 2000-01, wherein a penalty levied u/s 271(1)(C) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 28.3.2011 was confirmed by the Ld.CIT(Appeals).

2.

We have heard Shri Salil Agarwal, the Ld.Counsel for the assessee and Sh. K.K.Jaiswal, Ld.D.R. on behalf of the Revenue. 3. The argument of the Ld.Counsel for the assessee is that there is no specific charge in the notice issued u/s 271((1)(c) of the Act and hence the penalty order is bad in law. He also argued that the reopening of assessment is bad in law on various counts and hence the penalty levied on such invalid assessment is bad in law.

ITA 5931/Del/2013 A.Y. 2000-01 Bodhsons Investment & Finance Pvt. Ltd., New Delhi 4. Ld.D.R. submits that the reopening of assessment is held as valid by the Ld.CIT(A) in the quantum proceedings vide order dt. 14.10.2009 and this order has attained finality, and hence the assessee can not argue otherwise. On the issue of there being no specific charge in the notice u/s 271(1)(c) of the Act, the Ld.D.R. submitted that there were other notices u/s 271(1)(c) of the Act also in this case. He has not produced any o such notices before the Tribunal. 4.1. A copy of the notice issued u/s 274 r.w. S.271 of the Act dated 28.12.2007 is at page 77 of the assessee’s paper book. A perusal of the same demonstrates that none of the alternative charges in the printed form have been struck down. From a reading of this notice, it is not clear that the charge for which the notice was given is not clear. 4.2. The Hon’ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton Ginning Factory, 359 ITR 565, wherein the Hon’ble High Court considered the entire case law on the subject of levy of penalty u/s 271(1)(c ) of the Act and held as follows. (p) Notice under Section 274 of the Act should specifically state the grounds mentioned in Section 271(1)(c), i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. (q) Sending printed form where all the ground mentioned in Section 271 are mentioned would not satisfy requirement of law. (r) The assessee should know the grounds which he has to meet specifically. Otherwise, principles of natural justice is offended. On the basis of such proceedings, no penalty could be imposed to the assessee. 4.3. Similarly the ITAT, Mumbai Bench in the case of Shri Hafeez S.Contractor vs. ACIT (in and 6223/2013 held that the penalty u/s 271(1)(c ) cannot be imposed in case where no specific charges are mentioned in the penalty notice.

5.

By applying the propositions laid down in the above cited cases to the facts of this case, we delete the penalty levied u/s 271(1)(c) of the Act and allow the grounds of the assessee.

ITA 5931/Del/2013 A.Y. 2000-01 Bodhsons Investment & Finance Pvt. Ltd., New Delhi 6. In the result this appeal of the assessee is allowed. Order pronounced in the Open Court on 30th May, 2016.

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