Cobol Technologies Pvt. Ltd., New Delhi V. ACIT Central Circle-18, Delhi

ITA 698/DEL/2023

AI Insights

The case involves Cobol Technologies Pvt. Ltd., which appealed against a penalty of Rs. 4,19,240 imposed by the Assessing Officer under section 271(1)(c) of the Income Tax Act, 1961, due to additions made under section 68 concerning sundry creditors for the financial year 2013-14. The penalty was confirmed by the CIT(A), leading to the appeal before the Income Tax Appellate Tribunal. The Tribunal examined the notice issued for the penalty and found it to be vague, lacking specific grounds for the penalty as required by law. Citing judgments from the Karnataka, Bombay, and Delhi High Courts, the Tribunal held that the notice must clearly specify the grounds of penalty, which was not done in this case, leading to the allowance of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 116075 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 28-08-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 15-03-2023
• Other Referred Cases: CIT vs. Manjunatha Cotton and Ginning Factory, Mr. Mohd. Farhan A. Shaikh Vs ACIT, PCIT vs. Sahara India Life Insurance Co. Ltd., CIT vs. SSA'S Emerald Meadows
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK KR. UPADHYAY
• Section: 68; 271(1)(c); 274; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘B’, NEW DELHI Before Dr. B. R. R. Kumar, Accountant Member Ms. Astha Chandra, Judicial Member ITA No. 698/Del/2023 : Asstt. Year : 2014-15 Cobol Technologies Pvt. Ltd., 921A, Ninth Floor, Devika Tower, Nehru Place, New Delhi-110019 Vs. ACIT, Central Circle-18, New Delhi-110055 (APPELLANT) (RESPONDENT) PAN No. AALCS3846C Assessee by : None Revenue by : Sh. Vivek Kr. Upadhyay, Sr. DR Date of Hearing: 29.08.2023 Date of Pronouncement: 31.08.2023 ORDER Per Dr. B. R. R. Kumar, Accountant Member: The present appeal has been filed by the assessee against the order of ld. CIT(A)-27, New Delhi dated 16.01.2023. 2. The Assessing Officer levied penalty u/s 271(1)(c) of the IT Act of Rs.4,19,240/- on account of addition made u/s 68 of the Income Tax Act, 1961 in respect of sundry creditors for the F.Y. 2013-14. The penalty u/s 271(1)(c) has been confirmed by the ld. CIT(A). Aggrieved, the assessee filed appeal before us. 3. We have also gone through the notice u/s 274 r.w.s. 271(1)(c) of the Income Tax Act, 1961 issued by the Assessing Officer on 28.12.2017 which is a part of the record before us. We find that the Assessing Officer has issued the penalty order stating that, *have concealed the particulars of your income or furnished inaccurate particul ars of such income.” ITA No. 698/Del/2023 Cobol Technologies Pvt. Ltd. 2 4. On this issue, we are guided by the following judgments: 1) Karnataka High Court: CIT vs. Manjunatha Cotton and Ginning Factory: 359 ITR 565 held that notice under section 274 should specifically state the grounds mentioned in section 271(1)(c) of the Act, i.e., whether it is for concealment of income or for furnishing of incorrect particulars of income. Sending printed form where all the grounds mentioned in section 271 are mentioned would not satisfy requirement of law. 2) Bombay High Court: Mr. Mohd. Farhan A. Shaikh Vs ACIT Section 271(1)(c): Penalty-Concealment-Non-striking off of the irrelevant part while issuing notice u/s 271(1)(c) of the Income Tax Act, order is bad in law. Assessee must be informed of the ground of the penalty proceedings only through statutory notice. An omnibus notice suffers from the vice of vagueness. 3) The Hon’ble jurisdictional Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd. in ITA No. 475 of 2019, reiterated that notice under section 274 should specifically state the grounds on which penalty was sought to be imposed as the assessee should know the grounds which he has to meet specifically. 4) The aforesaid principle has been reiterated in the in the case of CIT vs. SSA'S Emerald Meadows: 73 taxmann.com 241 (Kar) [Revenue’s SLP dismissed in 242 Taxman 180] 5. Hence, respectfully following the order of the Hon’ble Jurisdictional High Court, since the AO has not been specified u/s 274 as to whether penalty is proposed for alleged ITA No. 698/Del/2023 Cobol Technologies Pvt. Ltd. 3 ‘concealment of income’ OR ‘furnishing of inaccurate particulars of such income’, the penalty levied is hereby obliterated. 6. In the result, the appeal of the assessee is allowed. Order Pronounced in the Open Court on 31/08/2023. Sd/- Sd/- (Astha Chandra) (Dr. B. R. R. Kumar) Judicial Member Accountant Member Dated: 31/08/2023 *Subodh Kumar, Sr. PS* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR