AI Insights
The case involves PHI Seeds Private Limited appealing against the penalty orders confirmed by the Ld. CIT(A)-38, New Delhi, for the assessment years 2002-03, 2003-04, 2005-06, and 2010-11. The penalties were imposed under section 271(1)(c) of the Income Tax Act, 1961. The primary contention of the assessee was the lack of clarity in the penalty notice regarding the specific charge—whether it was for concealment of income or furnishing of inaccurate particulars. The Tribunal noted the absence of a specific charge in the notice and referenced several judicial precedents supporting the need for clarity in such notices. Consequently, the Tribunal set aside the penalties, allowing the appeals.
Appeal details
Counselvise Citation
[2023] 140 COUNSELVISE.COM (IT) 121861 (ITAT-DELHI)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
3 year(s) 9 month(s) 28 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
09-05-2023
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
F
Next Hearing Date
07-05-2023
Assessment Year
2003-2004
Appeal Filed On
11-07-2019
Judgement Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘F’: NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA Nos.6015 to 6018/DEL/2019 [Assessment Years: 2002-03, 2003-04, 2005-06 & 2010-11] PHI Seeds Private Limited, Plot No.17, 8 th Floor, Unit B and 12 th Floor, Software Units Layout, Survey No.64/2, Madhapur, Serilingampali, Ranga Reddy, Telangana-500081 Vs Addl. Commissioner of Income Tax, Special Range-7, Room No.-211, C.R. Building, New Delhi PAN-AACCP3920F Assessee Revenue Assessee by Sh. Sandeep Bansal, CA & Ms. Ekta Jain, CA Revenue by Ms. Anupama Anand, CIT_DR & Sh. Sanjay Kumar, Sr. DR Date of Hearing 08.05.2023 Date of Pronouncement 10.05.2023 ORDER PER SHAMIM YAHYA, AM, These are appeals by the assessee is directed against the respective order of the Ld. CIT(A)-38, New Delhi, all dated 30.04.2019 pertaining to the Assessment Years 2002-03, 2003-04, 2005-06 & 2010-11, wherein, the Ld. CIT(A) has confirmed the levy of penalty u/s 271(1)(c) of the Act. 2. Since, the issues are common and connected and the appeals were heard together, these are being consolidated and disposed of together for the sake of convenience by this common order. 3. For the sake of reference, we are referring to grounds of appeal for Assessment Year 2002-03 reads as under:- 2 ITA Nos.6015 to 6018/Del/2019 “1. That on the facts and in the circumstances of the case, the Ld. Commissioner of Income tax (Appeal) erred in law in upholding the order passed by the assessing offer of imposing the penalty under section 271(1)(c) of the Income Tax Act, 1961 as none of the conditions for initiating penalty gets satisfied. 2. That the Ld. CIT(A) has erred in ignoring the fact that The Hon'ble Delhi High Court has admitted the substantial question of law on the agriculture exemption claim made by the appellant company u/s 10 r.w.s 2(1A) of the act thereby holding that it is a debatable issue. 3. That Ld. CIT(A) has erred in placing reliance on various decisions as mentioned in her order. 4. That the Ld. CIT(A) has erred in ignoring the fact that the notice issued by the Ld. AO under Section 271(1)(c) in the printed form without specifically mentioning whether the proceedings are initiated on the ground of concealment of income or on account of furnishing of inaccurate particulars is invalid and bad in law. 5. Without prejudice to the above, the penalty amount as computed by the Ld. AO is not in accordance with the provisions of law.” 4. At the outset, in this case, the ld. Counsel for the assessee submitted that the levy of penalty in this case is illegal in as much as charge in penalty notice is not clear as to whether it is for concealment of income or furnishing of inaccurate particulars of income. To support his proposition, he took us through the notice in this regard attached in the paper book. Furthermore, he placed reliance upon various case laws. This issue has also raised before the Ld. CIT(A). The Ld. CIT(A) has mentioned the submission in this regard but not given the judgment on this issue. 5. Per Contra, the ld. DR submitted that in the penalty order, it is clearly mentioned that the penalty is levied for furnishing of inaccurate particulars of income. But he could not dispute that the notice in this 3 ITA Nos.6015 to 6018/Del/2019 regard does not mention as to whether it is for concealment of income or furnishing of inaccurate particulars of income. Furthermore, we may gainfully refer to one of the notices of penalty for AY 2002-03 attached in paper book page-67 as under:- 4 ITA Nos.6015 to 6018/Del/2019 5.1. The charge is omnibus charge and mentioned that “have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1,2,3,4 and 5.” It is amply clear that charge has not been specified in the notice. The Ld. DR did not dispute this proposition. 6. Upon careful consideration and hearing both the parties, we find that notice issued u/s 271(1)(c) is omnibus notice without specifying the specific charge upon the assessee as to whether it is for concealment of income or furnishing of inaccurate particulars of income. In this regard, we may gainfully refer to the decision of the Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs ACIT in Tax Appeal No.51 and 57 of 2012 dated 11.03.2021. We may also refer to the order of Hon’ble jurisdictional High Court in the case of Pr. CIT vs Sahara India Life Insurance Company Ltd. in ITA No.475/2019 & ors. vide order darted 02.08.2019, the Hon’ble High Court has laid down the following exposition: “21. The Respondent had challenged the upholding of the penalty imposed under section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT vs Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA’s Emerald Meadows (2016) 73 Taxman.com 241(Kar.), the appeal against which was dismissed by the Supreme Court of India in SLP No.11485 of 2016 by order dated 05 th August, 2016.” 5 ITA Nos.6015 to 6018/Del/2019 7. Accordingly, following the precedent and on the undisputed proposition that relevant limb of penalty notices was not identified as to whether the penalty was for concealment or furnishing of inaccurate particulars of income, we set-aside the orders of the authorities below by holding that notice u/s 271(1)(c) is invalid. Accordingly the appeal of the assessee stands allowed. 8. Our above order applies mutatis mutandis to others assessment years as well. 9. In the result, all appeals of the assessee are allowed. Order pronounced in the open court on 10 th May, 2023. Sd/- Sd/- [ANUBHAV SHARMA] [SHAMIM YAHYA] JUDICIAL MEMBER ACCOUNTANT MEMBER Delhi; Dated: 10.05.2023. f{x~{tÜ f{x~{tÜf{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi 6 ITA Nos.6015 to 6018/Del/2019 Draft dictated 08.05.2023 Draft placed before author 09.05.2023 Approved Draft comes to the Sr.PS/PS Order signed and pronounced on File sent to the Bench Clerk Date of uploading on the website Date on which file goes to the AR Date on which file goes to the Head Clerk. Date of dispatch of Order.
