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Income Tax Appellate Tribunal, DELHI BENCH, ‘F’: NEW DELHI
Before: SHRI SHAMIM YAHYA & SHRI ANUBHAV SHARMA
ORDER PER SHAMIM YAHYA, AM,
These are appeals by the assessee is directed against the respective order of the Ld. CIT(A)-38, New Delhi, all dated 30.04.2019 pertaining to the Assessment Years 2002-03, 2003-04, 2005-06 & 2010-11, wherein, the Ld. CIT(A) has confirmed the levy of penalty u/s 271(1)(c) of the Act.
Since, the issues are common and connected and the appeals were heard together, these are being consolidated and disposed of together for the sake of convenience by this common order.
For the sake of reference, we are referring to grounds of appeal for Assessment Year 2002-03 reads as under:-
“1. That on the facts and in the circumstances of the case, the Ld. Commissioner of Income tax (Appeal) erred in law in upholding the order passed by the assessing offer of imposing the penalty under section 271(1)(c) of the Income Tax Act, 1961 as none of the conditions for initiating penalty gets satisfied.
2. That the Ld. CIT(A) has erred in ignoring the fact that The Hon'ble Delhi High Court has admitted the substantial question of law on the agriculture exemption claim made by the appellant company u/s 10 r.w.s 2(1A) of the act thereby holding that it is a debatable issue.
3. That Ld. CIT(A) has erred in placing reliance on various decisions as mentioned in her order.
4. That the Ld. CIT(A) has erred in ignoring the fact that the notice issued by the Ld. AO under Section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is invalid and bad in law.
5. Without prejudice to the above, the penalty amount as computed by the Ld. AO is not in accordance with the provisions of law.”
At the outset, in this case, the ld. Counsel for the assessee submitted that the levy of penalty in this case is illegal in as much as charge in penalty notice is not clear as to whether it is for concealment of income or furnishing of inaccurate particulars of income. To support his proposition, he took us through the notice in this regard attached in the paper book. Furthermore, he placed reliance upon various case laws.
This issue has also raised before the Ld. CIT(A). The Ld. CIT(A) has mentioned the submission in this regard but not given the judgment on this issue.
Per Contra, the ld. DR submitted that in the penalty order, it is clearly mentioned that the penalty is levied for furnishing of inaccurate particulars of income. But he could not dispute that the notice in this regard does not mention as to whether it is for concealment of income or furnishing of inaccurate particulars of income. Furthermore, we may gainfully refer to one of the notices of penalty for AY 2002-03 attached in paper book page-67 as under:-
5.1. The charge is omnibus charge and mentioned that “have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1,2,3,4 and 5.” It is amply clear that charge has not been specified in the notice. The Ld. DR did not dispute this proposition.
Upon careful consideration and hearing both the parties, we find that notice issued u/s 271(1)(c) is omnibus notice without specifying the specific charge upon the assessee as to whether it is for concealment of income or furnishing of inaccurate particulars of income. In this regard, we may gainfully refer to the decision of the Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs ACIT in Tax Appeal No.51 and 57 of 2012 dated 11.03.2021. We may also refer to the order of Hon’ble jurisdictional High Court in the case of Pr. CIT vs Sahara India Life Insurance Company Ltd. in & ors. vide order darted 02.08.2019, the Hon’ble High Court has laid down the following exposition:
“21. The Respondent had challenged the upholding of the penalty imposed under section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT vs Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA’s Emerald Meadows (2016) 73 Taxman.com 241(Kar.), the appeal against which was dismissed by the Supreme Court of India in SLP No.11485 of 2016 by order dated 05th August, 2016.”
Accordingly, following the precedent and on the undisputed proposition that relevant limb of penalty notices was not identified as to whether the penalty was for concealment or furnishing of inaccurate particulars of income, we set-aside the orders of the authorities below by holding that notice u/s 271(1)(c) is invalid. Accordingly the appeal of the assessee stands allowed.
Our above order applies mutatis mutandis to others assessment years as well.
In the result, all appeals of the assessee are allowed.
Order pronounced in the open court on 10th May, 2023.