2021 (3) TMI 1065 - AT - Income Tax

Penalty u/s 271(1)(c) - Defective notice - HELD THAT - As relying on M/S. SAHARA INDIA LIFE INSURANCE COMPANY LTD. 2019 (8) TMI 409 - DELHI HIGH COURT and M/S. BHARAT IMMUNOLOGICAL AND BIOLOGICAL CORPORATION LTD. 2019 (5) TMI 28 - ITAT DELHI A.O. has not pointed-out as to for which limb of Section 271(1)(c) of the I.T. Act 1961 penalty proceedings are initiated i.e. whether for concealment of particulars of income or for furnishing inaccurate particulars of income. Therefore the penalty notice is invalid and bad in Law and as such the entire proceedings are vitiated and no penalty is leviable against the assessee - Decided in favour of assessee.

Summary

Issues involved:
- Challenge against penalty under section 271(1)(c) of the I.T. Act, 1961 due to lack of specification regarding the limb of Section 271(1)(c) under which penalty proceedings were initiated.

Detailed Analysis:
- The judgment involved appeals by different Assessees against Orders of the Ld. CIT(A)-38, New Delhi, challenging the levy of penalty under section 271(1)(c) of the I.T. Act, 1961 for the A.Y. 2008-2009.
- The Assessees argued that the penalty proceedings were vitiated as the A.O. failed to specify the limb of Section 271(1)(c) under which the penalty was initiated, leading to the penalty being illegal and bad in law.
- Reference was made to a similar case by ITAT, Delhi C Bench, where the penalty order was quashed due to the same issue.
- The Assessee's counsel highlighted that the A.O. did not mention the specific limb of Section 271(1)(c) in the show cause notice, rendering the penalty proceedings invalid.
- The judgment cited decisions by the Hon'ble Supreme Court and the Hon'ble Karnataka High Court to support the contention that specifying the limb of Section 271(1)(c) is crucial for valid penalty proceedings.
- The judgment also referenced a case by the Hon'ble Delhi High Court where penalties were set aside due to the lack of specification regarding the limb of Section 271(1)(c).
- Ultimately, the tribunal concluded that the penalty was not leviable as the show cause notice failed to specify the relevant limb of Section 271(1)(c), following the precedent set by previous decisions.
- Based on the above analysis, the tribunal set aside the Orders of the authorities below and canceled the penalty in both appeals, allowing the appeals of the Assessees.