BAHAR AHMED,BIJNOR vs. ACIT, NAJIBABAD

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ITA 1004/DEL/2023Status: DisposedITAT Delhi11 September 2023AY 2014-15Bench: SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, SHRI KUL BHARAT (Judicial Member)5 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 issued under Section 274 was bad in law as it did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars. Following the Delhi High Court's decision in PCIT vs. Sahara India Life Insurance Company Limited, the penalty was directed to be deleted.

What were the facts?

The assessee's appeal was against the NFAC's confirmation of penalty under Section 271(1)(c) of the Income Tax Act. The penalty was levied based on additions made to the assessee's income for unexplained credits.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid if the notice under Section 274 does not specify the limb of the provision under which it is initiated.

Which sections of the Income-tax Act were involved?

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

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

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Income Tax Appellate Tribunal, DELHI ‘B’ BENCH,

Before: SHRI N.K. BILLAIYA, & SHRI KUL BHARAT

For Appellant: Shri PC Yadav, Advocate
For Respondent: Shri Kanav Bali, Sr. DR
Hearing: 11.09.2023Pronounced: 11.09.2023

PER N.K. BILLAIYA, ACCOUNTANT MEMBER

1.

This appeal by the assessee is preferred against the order dated 27.02.2023 by NFAC, Delhi pertaining to A.Y. 2014-15.

2 2. The solitary grievance of the assessee is that the NFAC erred in confirming the levy of penalty u/s. 271 (1)(c) of the Act amounting to Rs.5,97,835/-.

3.

The roots for the levy of penalty lie in the assessment order dated 29.12.2016 framed u/s. 143 (3) of the Act. The returned income of the assessee was assessed after making two additions namely :- i. Unexplained credits in respect of M/s. Hardco Woods, Kerala Rs. 99,487/- and ii. Unexplained credits in respect of Thar International amounting to Rs.21,54,935/-.

4.

The penalty proceedings were separately initiated for furnishing inaccurate particulars of income.

5.

The penalty was levied at Rs.2254422/- vide order dated 25.09.2019 for concealment of income.

6.

The notice issued u/s. 274 dated 29.12.2016 reads as under :-

4 7. It can be seen that the additions were made and the satisfaction drawn was for furnishing inaccurate particulars of income the penalty was levied for concealment of income and the notice is completely silent in respect of under which limb of the relevant provision the penalty is to be levied. The Hon’ble High Court of Delhi in the case of PCIT Vs. Sahara India Life Insurance Company Limited 432 ITR 84 at the occasion to consider a similar situation and held as under :- “21. The respondent had challenged the upholding of the penalty imposed under section 271 (1) (c) of the Act, which was accepted by the Income-tax Appellate Tribunal. It followed the decision of the Karnataka High Court in CIT Vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn) and observed that the notice issued by the Assessing Officer would be bad in law if it did not specify in which limb of section 271 (1) (c) the penalty proceedings had been initiated under, i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in CIT vs. SSA’s Emerald Meadows [2016] 73 taxmann.com 241 (Karn), the appeal against which was dismissed by the Supreme Court of India in 5 SLP No.11485 of 2016 by an order August, 5, 2016 (CIT V. SSA’s Emerald Meadows [2016] 386 ITR (St.) 13 (SC). 22. On this issue again this court is unable to find any error having been committed by the Income-tax Appellate Tribunal. No substantial question of law arises. 23. The appeals are accordingly dismissed.” 8. In the light of aforementioned biding decision of the Hon’ble Jurisdictional High Court of Delhi the penalty so levied is directed to be deleted.

9.

In the result, the appeal of the assessee is allowed.

10.

Decision announced in the open court on 11.09.2023.

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