M/S MODERN AGENCIES,,JHANSI vs. DCIT., CIRCLE-2(3)(1), JHANSI

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ITA 236/AGR/2018Status: DisposedITAT Agra06 February 2025AY 2010-11Bench: Sh. Satbeer Singh Godara, Judicial Member & Sh. M. Balaganesh (Accountant Member)3 pages
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What did the Tribunal hold?

The Tribunal admitted an additional ground raised by the assessee, holding that the penalty proceedings were vitiated because the Assessing Officer's show-cause notice did not specify the limb under Section 271(1)(c). This failure to specify renders the penalty proceedings invalid.

What were the facts?

The assessee's appeal was against a penalty levied under Section 271(1)(c) of the Income Tax Act. The lower authorities held that the assessee furnished inaccurate particulars of income, leading to a penalty of Rs. 10,00,000/-.

What were the issues?

Whether penalty proceedings under Section 271(1)(c) are vitiated if the Assessing Officer's show-cause notice fails to specify the limb under which the penalty is proposed to be levied.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

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Income Tax Appellate Tribunal, AGRA BENCH, AGRA

Before: Sh. Satbeer Singh Godara & Sh. M. Balaganesh

Hearing: 06.02.2025Pronounced: 06.02.2025

ORDER

Per Satbeer Singh Godara, Judicial Member:

1.

This assessee’s appeal for Assessment Year 2010-11, arises against the CIT(A)-2, Agra’s case No. 46/CIT(A)- 2/Agra/DCIT-2(3)(1)/Jhansi/2016-17 dated 30.11.2017, in proceedings u/s 271(1)(c) of the Income Tax Act, 1961 (in short “the Act”).

2.

Hear both the parties at length. Case file perused.

3.

It emerges at the outset during the course of hearing that both the learned lower authorities have held the assessee to have furnished it’s inaccurate particulars of income to levy section 271(1)(c) penalty in question amounting to 10,00,000/-

4.

The assessee has first of all sought to raise the additional ground(s) that once the learned Assessing Officer had admittedly issued his penalty show-cause notice u/s 271(1)(c) r.w.s. 274 of the Act not specifying any specific limb thereunder, his failure to this effect vitiates the entire proceedings. The Revenue on the other hand has vehemently objected to admission of the assessee’s instant additional ground at this belated stage. We are of the considered view that hon’ble apex court landmark decision in National Thermal Power Co. Ltd. vs. CIT (1998) 229 ITR 383 (SC) has settled the issue long back in assessee’s favour and against the department that the tribunal could very well entertain such an additional ground to determine correct tax liability provided all the relevant facts form part of the record. We make it clear that the Revenue has nowhere disputed the contents of the learned Assessing Officer’s show-cause notice dated 26.03.2013 herein.

5.

Faced with this situation, we admit the assessee’s instant additional ground and quote PCIT Vs. Sahara India Life Insurance Co. Ltd. (2021) 432 ITR 84 (Del.) and PCIT Vs. Gopal Kumar Goyal (2023) 153 taxmann.com 534 (Del.) to conclude ./2018 Modern Agencies that once the learned Assessing Officer has not specified the corresponding limb in his penalty show-cause notice forming part of the case records, his failure to this clinching effect indeed vitiates the penalty proceedings itself. We order accordingly.

6.

All other pleadings in merit in the assessee’s instant appeal stand rendered academic.

7.

This assessee’s appeal is allowed. Order Pronounced in the Open Court on 06/02/2025.

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