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2020 (10) TMI 837 - AT - Income TaxPenalty u/s 271(1)(c) - Defective notice - non specification of charge - assessment u/s 153A - HELD THAT - Notices are bad in Law as it did not specify under which limb of Section 271(1)(c) of the I.T. Act the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing inaccurate particulars of income. Since the issue of notice itself is bad in Law, therefore, it vitiate the entire penalty proceedings and as such, the penalty proceedings are liable to be quashed. In view of the above discussion, we set aside the Orders of the authorities below and quash the penalty proceedings and delete the penalties in all the appeals - SEE M/S SSA S EMERALD MEADOWS 2015 (11) TMI 1620 - KARNATAKA HIGH COURT AND M/S MANJUNATHA COTTON AND GINNING FACTORY OTHS., M/S. V.S. LAD SONS, 2013 (7) TMI 620 - KARNATAKA HIGH COURT - Decided in favour of assessee.
Issues:
Challenge against penalty under section 271(1)(c) of the I.T. Act for A.Ys. 2009-2010 to 2012-2013. Analysis: The appeals by the Assessee were directed against Orders of the Ld. CIT(A)-24, New Delhi, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961. The A.O. initiated penalty proceedings and levied penalties under section 271(1)(c) for different additions made in various assessment years. The Assessee contended that the show cause notices issued before the penalty did not specify the grounds under which the penalty was initiated, rendering the notices bad in law. The Assessee cited the judgment of the Hon'ble Delhi High Court in support of this argument. The Assessee argued that the show cause notices issued by the A.O. before the penalty was levied did not specify the limb of Section 271(1)(c) under which the penalty proceedings were initiated. Citing relevant case law, the Assessee contended that such notices are bad in law and referred to judgments where similar issues were addressed by the Karnataka High Court and the Delhi High Court. The Assessee relied on these judgments to support the argument that the lack of specificity in the notice vitiates the penalty proceedings. The Tribunal considered the submissions of both parties and observed that the show cause notices indeed did not specify the grounds under which the penalty proceedings were initiated. Citing the judgments of the Karnataka High Court and the Delhi High Court, the Tribunal held that the lack of specificity in the notice renders the penalty proceedings invalid. Therefore, the Tribunal set aside the Orders of the authorities below, quashed the penalty proceedings, and deleted the penalties in all the appeals. As a result, the Tribunal allowed all the appeals of the Assessee based on the invalidity of the notice initiating the penalty proceedings. In conclusion, the Tribunal found that the lack of specification in the show cause notices regarding the grounds for initiating the penalty proceedings rendered the penalty proceedings invalid. Relying on relevant case law, the Tribunal quashed the penalties imposed under section 271(1)(c) of the I.T. Act for the Assessee for the relevant assessment years. The appeals of the Assessee were allowed, and the penalties were deleted based on the invalidity of the notice.
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