Sunil Bagga, New Delhi V. ITO, Ward-40(3), New Delhi

ITA 6068/DEL/2019

AI Insights

The case involves an appeal by Sunil Bagga against the order of the CIT (Appeals)-14, New Delhi, which sustained a penalty of Rs.7,18,790 imposed by the Assessing Officer under section 271(1)(c) of the Income-tax Act, 1961, for the Assessment Year 2009-10. The penalty was based on an addition of Rs.21,14,710 to the assessee's income, identified as unexplained cash credits. The primary contention in the appeal was the lack of specification in the penalty notice regarding the exact nature of the penalty, whether for concealment of income or furnishing of inaccurate particulars. The Tribunal, referencing decisions from the CIT vs. SSA Emerald Meadows and CIT vs. Manjunath Cotton Ginning Factory, found the notice to be defective and thus quashed the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 114048 (ITAT-DELHI)
• Duration Of Justice: 3 year(s) 7 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-03-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 06-03-2023
• Assessment Year: 2009-2010
• Appeal Filed On: 15-07-2019
• Other Referred Cases: CIT vs. SSA Emerald Meadows, CIT vs. Manjunath Cotton Ginning Factory, Mr. Mohd. Farhan A. Shaikh v. ACIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 271(1)(c); 274

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH ‘SMC’ : NEW DELHI) SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA No.6068/Del./2019 (ASSESSMENT YEAR : 2009-10) Sunil Bagga, vs. ITO, Ward 40 (3), 104, Sainik Vihar Pitampura, New Delhi. Delhi – 110 034. (PAN : AHWPB9538M) (APPELLANT) (RESPONDENT) ASSESSEE BY : None REVENUE BY : Shri Om Prakash, Sr. DR Date of Hearing : 07.03.2023 Date of Order : 13.03.2023 ORDER This appeal by the assessee is directed against the order of ld. CIT (Appeals)-14, New Delhi dated 17.06.2019 pertaining to Assessment Year 2009-10. 2. The grounds of appeal taken by the assessee read as under :- “1. On the facts and in law, the Ld. CIT (A) grossly erred in sustaining the penalty of Rs.7,18,790/- imposed by the Assessing Officer u/s 271(1)(c) of the I.T. Act, 1961. 2. On the facts and in law, the Ld. CIT (A) did not allow proper opportunity to the appellant and passed the order in haste.” ITA No.6068/Del./2019 2 3. In this case, in the assessment order, Assessing Officer added Rs.21,14,710/- on account of unexplained cash credits deposited in the bank. Penalty proceedings were also initiated on this. Before the ld. CIT(A), assessee has taken a ground that in the notice under section 274 r.w.s. 271(1)(c) of the Income-tax Act, 1961 (for short 'the Act'), there is no indication that the penalty is initiated for concealment of income or furnishing of inaccurate particulars of income. In this regard, assessee placed reliance on the decision of CIT vs. SSA Emerald Meadows and CIT vs. Manjunath Cotton Ginning Factory. Ld. CIT (A) was not convinced and opined that these decisions are not applicable and hence, he confirmed the levy of penalty. 4. Against this order, assessee is in appeal before me. I have heard the ld. DR for the Revenue and perused the records. None appeared on behalf of the assessee despite notice. 5. I find that non-specification of the limb of notice of penalty is a fatal error and the penalty order on this count is liable to be quashed. This has been so held by various Hon’ble High Courts and this view was also recently reiterated by Hon'ble Bombay High Court (Full Bench at Goa) in the case of Mr. Mohd. Farhan A. Shaikh v. ACIT in Tax Appeal No. 51 and 57 of 2012 dated 11.03.2021. Accordingly, since, in the present case also, the notice of penalty does not specify the limb and, ITA No.6068/Del./2019 3 therefore, notice is defective and penalty levied on this defective notice is quashed. Hence, I set aside the orders of the authorities below and direct to delete the penalty. 6. In the result, assessee’s appeal stands allowed. Order pronounced in the open court on this 13 th day of March, 2023. Sd/- (SHAMIM YAHYA) ACCOUNTANT MEMBER Dated the 13 th day of March, 2023 TS Copy forwarded to: 1.Appellant 2.Respondent 3.CIT 4.CIT(A)-14, New Delhi. 5.CIT(ITAT), New Delhi. AR, ITAT NEW DELHI.