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2022 (6) TMI 883 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice u/s 274 - assessee argued for non specification of charge - HELD THAT - Full Bench of Hon ble Bombay High Court in the case of Mr. Mohd. Farhan A. Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT has adjudicated the issue and has come to the conclusion that non-ticking of the limb of notice specifying charge under notice 271(1)(c) as to whether it is for concealment of income or for furnishing of inaccurate particulars of income, is fatal. In this case, we note that ld. CIT (A) has brushed aside this issue. Ld. DR for the Revenue has submitted that this aspect needs to be verified at the level of ld. CIT (A) by referring to the assessment record, as to the compliance of requirements of law in this regard. We are of the considered opinion that the matter should be remitted to the file of ld. CIT (A) who will consider this issue in detail after considering the decision of Hon ble Bombay High Court referred above. We are not commenting on other aspects of merit in this case since we are remitting the grounds on the issue of jurisdiction, as otherwise it will lead to multiplication of proceedings - Appeal of assessee allowed for statistical purposes.
Issues involved:
Sustenance of penalty under section 271(1)(c) of the Income-tax Act, 1961. Analysis: 1. Initiation of Penalty Proceedings: The appeal before the Appellate Tribunal ITAT DELHI concerned the sustenance of penalty under section 271(1)(c) of the Income-tax Act, 1961. The grounds of appeal raised by the assessee challenged the order of the ld. CIT (Appeals)-22, New Delhi for the assessment year 2005-06. The primary contention was that the penalty was confirmed without the Assessing Officer specifying the charge for which the penalty was being imposed. The appellant argued that the penalty was imposed without a clear indication of whether it was for concealment of income or furnishing inaccurate particulars. However, the Tribunal noted that the Assessing Officer had initiated penalty proceedings under section 271(1)(c) separately and had clearly indicated that the penalty was for concealment of income. The Tribunal emphasized that even if there was vagueness in the initiation of penalty proceedings, it did not prejudice the appellant as the nature of the charge was evident from the assessment order. The Tribunal rejected the appellant's argument that the penalty order was vitiated due to lack of specificity in the initiation of penalty proceedings. 2. Legal Precedents and Analysis: The Tribunal referred to various legal precedents to support its decision. It cited the decisions of the Hon'ble Madras High Court, the Hon'ble Bombay High Court, and the Hon'ble ITAT Mumbai to emphasize that the initiation of penalty proceedings, even if not explicitly specified, does not invalidate the penalty order if the nature of the charge is clear from the assessment order. The Tribunal highlighted that the appellant's understanding of the penalty proceedings was crucial, and any minor errors in language should not undermine the validity of the penalty. By relying on legal precedents and analyzing the factual background of the case, the Tribunal concluded that the penalty order was not vitiated by any alleged errors in the initiation of penalty proceedings. 3. Remittance of the Matter: However, the Tribunal acknowledged the significance of the issue related to the initiation of penalty proceedings under section 271(1)(c) and the jurisdictional aspect involved. In light of the decision of the Full Bench of the Hon'ble Bombay High Court, which deemed the non-ticking of the limb of notice specifying the charge as fatal, the Tribunal decided to remit the matter back to the ld. CIT (A) for detailed consideration. The Tribunal directed the ld. CIT (A) to review this issue in light of the legal precedent cited and the compliance requirements under the law. The Tribunal refrained from commenting on other aspects of merit in the case to avoid multiplying proceedings. Once the ld. CIT (A) completes the order upon remand, both parties were granted the liberty to file necessary appeals if deemed necessary. 4. Final Decision: In conclusion, the Tribunal allowed the appeal of the assessee for statistical purposes, indicating that the matter was remitted to the ld. CIT (A) for further consideration regarding the initiation of penalty proceedings under section 271(1)(c). The order was pronounced in the open court on the 7th day of June 2022. By providing a detailed analysis of the issues raised and the Tribunal's decision, the summary encapsulates the key legal arguments, precedents, and the ultimate outcome of the case before the Appellate Tribunal ITAT DELHI.
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