2022 (4) TMI 1120 - AT - Income Tax

Penalty imposed u/s. 271(1)(c) - notice issued initiating the penalty proceedings being defective - HELD THAT - After perusing the notices issued under section 271(1)(c) for all the impugned assessment years, even dt. 21/03/2006, it is apparent that the irrelevant portion having been not struck off by the A.O. in the said notices and the exact charge/s against the assessee as to whether he concealed the particulars of his income or furnishing inaccurate particulars of such income was not clear. As the decision rendered by the Hon'ble Bombay High Court in the case of Mohd. Farhan A. Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT is squarely applicable in the present case and even the Ld. DR has not disputed this aspect of the matter. We, therefore, respectfully following the said decision of the Hon'ble Bombay High Court quash the impugned penalty imposed by the Assessing Officer under section 271(1)(c) - Appeal of assessee allowed.

Summary

Issues:
1. Delay in filing appeals before the Commissioner of Income Tax (Appeals).
2. Condonation of delay due to health reasons.
3. Merits of the case challenging the penalty imposed under section 271(1)(c) of the Income Tax Act.

Issue 1: Delay in filing appeals before the Commissioner of Income Tax (Appeals):
The appeals were filed against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Years 2001-02, 2002-03, 2003-04, 2004-05. The appellant submitted reasons for a 30-day delay in filing the appeals, citing health issues as the cause. The appellant, a senior partner in a Chartered Accountants firm, had a cardiac problem and underwent treatment, leading to the delay. The appellant's representative also confirmed awareness of the proceedings. The Departmental Representative opposed the delay condonation, asserting lack of explanation. The Tribunal noted the non-deliberate nature of the delay due to health reasons and referred to legal precedents emphasizing substantial justice over technicalities.

Issue 2: Condonation of delay due to health reasons:
The Tribunal considered the appellant's health-related delay in filing the appeals. Citing Supreme Court and High Court judgments, the Tribunal highlighted the importance of substantial justice and the need to distinguish between deliberate and non-deliberate delays. The Tribunal found the appellant's health issues constituted a sufficient cause for the delay, emphasizing the absence of malafide intent. The Tribunal concluded that the delay of 30 days should be condoned, allowing the appeals to proceed on merits.

Issue 3: Merits of the case challenging the penalty imposed under section 271(1)(c) of the Income Tax Act:
The appellant challenged the penalty imposed under section 271(1)(c) on the grounds of defective notice issuance. The notices lacked clarity on whether the appellant concealed income or furnished inaccurate particulars. Citing a Bombay High Court case, the Tribunal emphasized the need for precise notices to avoid ambiguity. Relying on legal principles, the Tribunal quashed the penalties imposed by the Assessing Officer under section 271(1)(c) of the Act. Consequently, all appeals of the assessee were allowed based on the merits of the case.

In conclusion, the Tribunal addressed the delay in filing appeals, condoning it due to health reasons, and subsequently analyzed the merits of the case challenging the penalties imposed under section 271(1)(c) of the Income Tax Act. The decision to allow the appeals was based on legal principles emphasizing substantial justice and the importance of clear and unambiguous notices in penalty proceedings.