2019 (11) TMI 521 - AT - Income Tax

Penalty u/s 271(1)(c) - non-striking of the irrelevant portion of the notice issued u/sec. 274 - whether the notice issued by the Assessing Officer dated 07/01/2009 is valid or not ? - HELD THAT - Hon'ble High Court of Telangana A.P. in the case of Smt. Baisetty Revathi 2017 (7) TMI 776 - ANDHRA PRADESH HIGH COURT has considered the very same issue and held that non-striking of the irrelevant portion of the notice issued u/sec. 274 is invalid. The very same judgment has been followed by the coordinate bench of this tribunal in the case of Konchada Sreeram 2017 (11) TMI 1164 - ITAT VISAKHAPATNAM . Therefore, respectfully following above referred to judicial precedents, we hold that the notice issued under section 274 read with section 271, dated 07/01/2009 is invalid and, therefore penalty order passed by the Assessing Officer, dated 26/02/2016 is hereby cancelled. Appeals filed by the assessees are allowed.

Summary

Issues:
1. Delay in filing appeals
2. Validity of penalty notice u/sec. 271(1)(c)

Issue 1: Delay in filing appeals

The appeals were filed against separate orders of Commissioner of Income Tax (Appeals) for the Assessment Year 2006-07, with a delay of 118 days. The appellant, a Non-Resident Indian residing in the USA, cited reasons for the delay due to the serious illness of his representative, who was his father. The delay was explained through medical certificates, and it was deemed valid by the tribunal. The delay was condoned, and the appeals were heard together and disposed of in a consolidated order.

Issue 2: Validity of penalty notice u/sec. 271(1)(c)

The appellant raised an additional ground before the tribunal questioning the validity of the penalty order passed under section 271(1)(c) due to the vague nature of the notice issued by the Assessing Officer. The notice did not clearly specify whether the penalty proceedings were for concealment of income or furnishing inaccurate particulars. The tribunal admitted the additional ground, considering it a legal issue going to the root of the matter.

After hearing arguments from both sides, the tribunal analyzed the notice issued by the Assessing Officer and found it to be vague and not in compliance with legal standards. Citing relevant judicial precedents, including a judgment by the Hon'ble High Court of Telangana & A.P., the tribunal concluded that the notice was invalid. Therefore, the penalty order passed by the Assessing Officer was canceled, and the appeals filed by the assessees were allowed.

In conclusion, the tribunal addressed the issues of delay in filing appeals and the validity of the penalty notice u/sec. 271(1)(c) comprehensively, ensuring that legal principles and precedents were applied to deliver a just decision in the matter.