NARESH KUMAR JAIN,DELHI vs. JCIT (OSD), CENTRAL CIRCLE-26, DELHI
In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.
What did the Tribunal hold?
The Tribunal held that the penalty notice issued under Section 274 read with Section 271(1)(c) was bad in law as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following jurisdictional High Court judgments, the penalty was obliterated.
What were the facts?
The assessee appealed against the penalty levied under Section 271(1)(c) of the Income Tax Act, which was confirmed by the CIT(A). The penalty was based on an addition of commission income made on an estimation basis.
What were the issues?
Whether a penalty under Section 271(1)(c) is valid if the notice under Section 274 does not specifically state the charge of concealment or furnishing inaccurate particulars of income.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(3)Show listHide list
Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.
- CIT v. Manjunatha Cotton & Ginning Factory2,590 citing359 ITR 565 · 2013 · HC · Read judgment
- CIT v. SSA’s Emerald Meadows953 citing242 Taxmann 180 · 2016 · SC
- CIT v. SSA’s Emerald Meadows791 citing73 Taxmann.com 241 · 2016 · HC
Income Tax Appellate Tribunal, DELHI BENCH ‘E’, NEW DELHI
Before: Sh. Kul BharatDr. B. R. R. Kumar
Heard together (6 matters)
Read from the judgment's own cause title. This page is filed under one of them.
ORDER Per Bench: The present appeals have been filed by assessee against the orders of ld. CIT(A)-29, New Delhi, dated 23.03.2023.
Since, the issues involved in all these appeals are similar, they were heard together and being adjudicated by a common order.
“1. On the facts and circumstances of the case, the order passed by the Learned CIT(A) is bad both in the eyes of law and on fact.
2. On the facts and circumstance of the case, the Learned CIT(A) has erred both on facts and in laws in confirming the penalty of Rs. 17,55,954/- levied by the AO under section 271(1 )(c) of the Act.
On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming the penalty levied on the addition of Rs. 56,82,698/- on account of unaccounted commission income made by the AO on estimation basis invoking the provision of section 68 of the Act.
4. On the facts and circumstances of the case, the learned CIT(A) has erred, both on facts and in law, in confirming the penalty and rejecting the contention of the assessee that on an addition made on the basis of estimation no penalty under section 271(1)(c) can be levied.
5. On the facts and circumstances of the case, the learned CIT (A) has erred both on facts and in law in confirming penalty levied by the AO despite the fact that the addition itself is not tenable In law.
On the facts and circumstances of the case the learned CIT (A) has erred both on facts and in law in ignoring the contention of the assessee that the penalty proceedings are independent proceedings, as such mere addition does not lead to levy of penalty.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in levying penalty despite the fact that the notice issued by AO u/s 274 read with section 271 (1 )(c) of the Act does not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in 3 to 1262/Del/2023 Naresh Kumar Jain confirming the penalty levied by the AO rejecting the contention of the assessee that penalty was levied without giving finding on merits of the case as concealment of income as well as furnishing of inaccurate particulars of income.
On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in levying penalty despite the fact that there is neither concealment of income nor furnishing the inaccurate particulars of income by the assessee.
On the facts and circumstances of the case, learned CIT (A) has erred, both on facts and in law, in rejecting the contention of assessee that the penalty order passed is bad in the eyes of law as the same was passed in violation of circular no. 19/2019 issued by CBDT which mandates that no order shall be passed without there being Valid Document Identification Number (DIN).”
This issue of specifying the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income in the penalty notice has been settled by the judgments of various Hon’ble High Courts. On this issue, we are guided by the following judgments:
1) Karnataka High Court: CIT vs. Manjunatha Cotton and Ginning Factory: 359 ITR 565 held that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy requirement of law. 2) Bombay High Court: Mr. Mohd. Farhan A. Shaikh Vs ACIT Section 271(1)(c): Penalty-Concealment-Non-striking off of 4 to 1262/Del/2023 Naresh Kumar Jain the irrelevant part while issuing notice u/s 271(1)(c) of the Income Tax Act, order is bad in law. Assessee must be informed of the ground of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. 3) The Hon’ble jurisdictional Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. in ITA No. 475 of 2019, reiterated that notice under section 274 should specifically state the grounds on which penalty was sought to be imposed as the assessee should know the grounds which he has to meet specifically. 4) The aforesaid principle has been reiterated in the in the case of CIT vs. SSA'S Emerald Meadows: 73 taxmann.com 241 (Kar) [Revenue’s SLP dismissed in 242 Taxman 180]
Hence, respectfully following the order of the Hon’ble Jurisdictional High Court, since the AO has not been specified u/s 274 as to whether penalty is proposed for alleged ‘concealment of income’ OR ‘furnishing of inaccurate particulars of such income’, the penalty levied is hereby obliterated.
More judgments on Section 271(1)(c)
- Ajaybhai Dineshbhai Bagdai, Near Central… vs The Income Tax Officer, Ward-1(2)(1), New…ITA 74/RJT/2026[2013-14]Status: Disposed19 Oct 2026AY 2013-14
- Shalin Jayantbhai Desai, Vadodara vs ACIT, Circle-4(2), Vadodara Present…ITA 2569/AHD/2026[2010-11]Status: Disposed19 Oct 2026AY 2010-11
- Neo Structo Construction P. Ltd., Ahmedabad vs The Pr. CIT- 3, AhmedabadITA 1216/AHD/2026[2015-2016]Status: Disposed16 Oct 2026AY 2015-2016
- Hetal Vinodchandra Sheth, Ahmedabad vs The ITO, Ward-5(3)(1), AhmedabadITA 2370/AHD/2025[2014-15]Status: Disposed16 Oct 2026AY 2014-15
- Hetal Vinodchandra Sheth, Ahmedabad vs The ITO, Ward-5(3)(1), AhmedabadITA 2369/AHD/2025[2014-15]Status: Disposed16 Oct 2026AY 2014-15
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