Bahar Ahmed, Bijnor V. ACIT, Najibabad

ITA 1004/DEL/2023

AI Insights

The case involves Bahar Ahmed, the appellant, contesting a penalty imposed by the National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2014-15. The penalty was based on additions made to the assessee's income regarding unexplained credits from two entities. The primary legal contention was the lack of specificity in the penalty notice regarding the exact nature of the offense under section 271(1)(c) of the Income Tax Act. The Tribunal referenced decisions from the Delhi and Karnataka High Courts, which emphasized the necessity of clear communication in penalty notices to uphold legal standards and ensure fair trial rights.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 300871 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-09-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 10-09-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 05-04-2023
• Other Referred Cases: PCIT Vs. Sahara India Life Insurance Company Limited, CIT Vs. Manjunatha Cotton and Ginning Factory, CIT vs. SSA's Emerald Meadows
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Question of law
• Section: 274; 73; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘B’ BENCH, NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI KUL BHARAT, JUDICIAL MEMBER ITA No.1004/DEL/2023 [A.Y. 2014-15] Bahar Ahmed Vs. ACIT Dariyapur, Opp. Truck Union, Najibabad Near Railway Crossing Najibabad, Najibabad Uttar Pradesh 246763 (Applicant) (Respondent) Assessee By : Shri PC Yadav, Advocate Department By : Shri Kanav Bali, Sr. DR Date of Hearing : 11.09.2023 Date of Pronouncement : 11.09.2023 ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER This appeal by the assessee is preferred against the order dated 27.02.2023 by NFAC, Delhi pertaining to A.Y. 2014-15. 2 2. The solitary grievance of the assessee is that the NFAC erred in confirming the levy of penalty u/s. 271 (1)(c) of the Act amounting to Rs.5,97,835/-. 3. The roots for the levy of penalty lie in the assessment order dated 29.12.2016 framed u/s. 143 (3) of the Act. The returned income of the assessee was assessed after making two additions namely :- i. Unexplained credits in respect of M/s. Hardco Woods, Kerala Rs. 99,487/- and ii. Unexplained credits in respect of Thar International amounting to Rs.21,54,935/-. 4. The penalty proceedings were separately initiated for furnishing inaccurate particulars of income. 5. The penalty was levied at Rs.2254422/- vide order dated 25.09.2019 for concealment of income. 6. The notice issued u/s. 274 dated 29.12.2016 reads as under :- 3 4 7. It can be seen that the additions were made and the satisfaction drawn was for furnishing inaccurate particulars of income the penalty was levied for concealment of income and the notice is completely silent in respect of under which limb of the relevant provision the penalty is to be levied. The Hon’ble High Court of Delhi in the case of PCIT Vs. Sahara India Life Insurance Company Limited 432 ITR 84 at the occasion to consider a similar situation and held as under :- “21. The respondent had challenged the upholding of the penalty imposed under section 271 (1) (c) of the Act, which was accepted by the Income-tax Appellate Tribunal. It followed the decision of the Karnataka High Court in CIT Vs. Manjunatha Cotton and Ginning Factory [2013] 359 ITR 565 (Karn) and observed that the notice issued by the Assessing Officer would be bad in law if it did not specify in which limb of section 271 (1) (c) the penalty proceedings had been initiated under, i.e. whether for concealment of particulars of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in CIT vs. SSA’s Emerald Meadows [2016] 73 taxmann.com 241 (Karn), the appeal against which was dismissed by the Supreme Court of India in 5 SLP No.11485 of 2016 by an order August, 5, 2016 (CIT V. SSA’s Emerald Meadows [2016] 386 ITR (St.) 13 (SC). 22. On this issue again this court is unable to find any error having been committed by the Income-tax Appellate Tribunal. No substantial question of law arises. 23. The appeals are accordingly dismissed.” 8. In the light of aforementioned biding decision of the Hon’ble Jurisdictional High Court of Delhi the penalty so levied is directed to be deleted. 9. In the result, the appeal of the assessee is allowed. 10. Decision announced in the open court on 11.09.2023. Sd/- Sd/- [KUL BHARAT] [N.K. BILLAIYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: SEPTEMBER, 2023. *Neha* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi