2023 (5) TMI 781 - AT - Income Tax

Penalty u/s 271(1)(c) - defect in the penalty notice u/s 274 - omnibus notice - as argued charge in the penalty notice is not specified as to whether penalty is levied on account of concealment of particulars of income or for furnishing of inaccurate particulars of income - HELD THAT - We note that non-specification of charge in penalty notice is fatal. In the present case, it is the claim of assessee that specific limb was not specified. This averment has not been disputed by the Revenue. In such circumstances, when penalty notice is an omnibus notice and the charge is not specified, penalty under section 271(1)(c) of the Act will not survive. See case of Mr. Mohd. Farhan A. Shaikh 2021 (3) TMI 608 - BOMBAY HIGH COURT and Sahara India Life Insurance Co. Ltd. 2019 (8) TMI 409 - DELHI HIGH COURT - Thus, since the penalty notice is omnibus and the charge has not been specified, the penalty is not sustainable. Decided against revenue.

Summary

Issues Involved:
The issues involved in this case are related to appeals by the Revenue against the orders of the ld. CIT (Appeals) for the concerned assessment years. The main issue revolves around the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961, for furnishing inaccurate particulars of income.

ITAT No.1926/Del/2018:
The appeal in ITAT No.1926/Del/2018 concerns the deletion of an addition of Rs.12,03,491 as a penalty under section 271(1)(c) of the Income-tax Act, 1961. The parties agreed that the tax effect in this case is below the limit set by the CBDT for filing an appeal in ITAT, leading to the dismissal of the appeal on the grounds of tax effect.

ITAT No.1925/Del/2018:
In ITAT No.1925/Del/2018, the assessee filed a petition under Rule 27 of the Appellate Tribunal Rules, 1963, challenging the penalty imposed under section 271(1)(c) of the Income Tax Act, 1961. The petition highlighted errors in the imposition of the penalty and the lack of specificity in the penalty notice regarding the nature of the penalty.

Judgment Summary:
The Tribunal admitted the petition filed under Rule 27 after hearing both parties. The petition raised concerns about the penalty notice not specifying whether the penalty was for concealment of particulars of income or for furnishing inaccurate particulars of income. The Tribunal found that the non-specification of the charge in the penalty notice was fatal, and since the specific limb was not identified, the penalty was deemed not sustainable. Citing relevant precedents, including decisions by the Bombay High Court and the Delhi High Court, the Tribunal upheld the orders of the ld. CIT (A) deleting the penalty. Consequently, the appeals filed by the Revenue were dismissed.

Separate Judgment:
No separate judgment was delivered by the judges in this case.