2019 (11) TMI 1409 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - HELD THAT - AO has not mentioned under which limb of the section 271 (1)(c) the penalty is being initiated. In the notice issued u/s 274, the Assessing Officer has not specified that under which limb he is initiating the penalty proceedings i.e. for concealment of income or for furnishing of inaccurate particulars of income. Similarly even the penalty order do not specify under which limb the penalty is being levied penalty order. Keeping in view of the facts narrated above and the judgment of the jurisdictional high court in the case of CIT Vs. Sahara India Life Insurance ltd 2019 (8) TMI 409 - DELHI HIGH COURT we hereby direct the penalty levied by the Revenue be obliterated. - Decided in favour of assessee.

Summary

Issues:
- Imposition of penalty under section 271(1)(c) for a specific amount.
- Failure to specify the limb under which penalty proceedings were initiated.
- Comparison with relevant case laws and previous judgments.
- Arguments presented by both parties.
- Analysis of the penalty notice and order by the Assessing Officer.
- Reference to the judgment of the jurisdictional high court.
- Decision to obliterate the penalty levied by the Revenue.

The judgment by the Appellate Tribunal ITAT Delhi involved the imposition of a penalty under section 271(1)(c) for a specific amount. The appeals were filed against the orders of the ld. CIT(A)-3, Gurgaon. The issues in both appeals were common and were heard together. The assessee raised grounds challenging the imposition of the penalty, citing reasons such as bona fide claims for deductions under different sections of the Act. The Tribunal referred to previous judgments and case laws, emphasizing the necessity of specifying the limb under which penalty proceedings were initiated. The Tribunal noted that the Assessing Officer failed to mention the specific limb under section 271(1)(c) in both the penalty notice and order.

During the proceedings, the assessee argued that the case was aligned with the judgment of the jurisdictional high court in a specific case, emphasizing the importance of specifying the limb for penalty proceedings. The Tribunal considered the arguments of both parties, including references to relevant case laws cited by the Revenue. The Tribunal analyzed the penalty notice and order issued by the Assessing Officer, highlighting the lack of specification regarding the limb under which the penalty was imposed.

In light of the facts presented and the judgment of the jurisdictional high court, the Tribunal decided to obliterate the penalty levied by the Revenue. The decision was based on the failure of the Assessing Officer to specify the limb under which the penalty proceedings were initiated, aligning with the legal principles established in the relevant case laws. As a result, both appeals of the assessee were allowed, and the penalty imposed was set aside.