COBOL TECHNOLOGIES PVT. LTD.,NEW DELHI vs. ACIT CENTRAL CIRCLE-18, DELHI

PDF · subscribers
ITA 698/DEL/2023Status: DisposedITAT Delhi31 August 2023AY 2014-15Bench: Dr. B. R. R. Kumar, Accountant Member Ms. Astha Chandra (Judicial Member)3 pages
AI SummaryAllowed

What did the Tribunal hold?

The ITAT held that the penalty notice issued under Section 274 was vague 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 quashed.

What were the facts?

The Assessing Officer levied a penalty under Section 271(1)(c) of the IT Act on the assessee for an addition made under Section 68. The CIT(A) confirmed the penalty. The assessee appealed to the ITAT.

What were the issues?

Whether a penalty notice under Section 274 is valid if it does not specifically state the grounds for penalty under Section 271(1)(c)?

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 68,Section 274

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show 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.

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

Before: Dr. B. R. R. KumarMs. Astha Chandra

Hearing: 29.08.2023Pronounced: 31.08.2023

ORDER

Per Dr. B. R. R. Kumar, Accountant Member:

1.

The present appeal has been filed by the assessee against the order of ld. CIT(A)-27, New Delhi dated 16.01.2023.

2.

The Assessing Officer levied penalty u/s 271(1)(c) of the IT Act of Rs.4,19,240/- on account of addition made u/s 68 of the Income Tax Act, 1961 in respect of sundry creditors for the F.Y. 2013-14. The penalty u/s 271(1)(c) has been confirmed by the ld. CIT(A). Aggrieved, the assessee filed appeal before us.

3.

We have also gone through the notice u/s 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961 issued by the Assessing Officer on 28.12.2017 which is a part of the record before us. We find that the Assessing Officer has issued the penalty order stating that, *have concealed the particulars of your income or furnished inaccurate particulars of such income.”

4.

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 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 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]

5.

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

Cobol Technologies Pvt. Ltd. ‘concealment of income’ OR ‘furnishing of inaccurate particulars of such income’, the penalty levied is hereby obliterated.

6.

In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 31/08/2023.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →