Ramchandra Ram Reddy, Nashik V. The Deputy Commissioner of Income Tax, Central Circle-2(1), Pune

ITA 721/PUN/2023

AI Insights

The case involves an appeal by Shri Ramchandra Ram Reddy against a penalty imposed by the Deputy Commissioner of Income Tax, Central Circle-2(1), Pune, under section 271(1)(c) of the Income Tax Act, 1961, for the Assessment Year 1998-1999. The penalty was initially confirmed by the Commissioner of Income Tax (Appeals), Pune-11. The primary contention in the appeal was the procedural inadequacy of the penalty show cause notice issued by the Assessing Officer, which failed to clearly specify the nature of the alleged wrongdoing—whether it was concealment of income or furnishing of inaccurate particulars. The Tribunal, referencing a landmark decision by the Bombay High Court, found this omission to be a critical flaw, leading to the deletion of the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 137907 (ITAT-PUNE)
• Duration Of Justice: 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 25-10-2023
• Assessment Year: 1998-1999
• Appeal Filed On: 15-06-2023
• Other Referred Cases: Mohd. Farhan A.Shaikh Vs. ACIT 434 ITR 1 (Bom)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B” : PUNE BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER AND SHRI GD PADMAHSHALI, ACCOUNTANT MEMBER ITA No.721/PUN/2023 Assessment Year 1998-1999 Shri Ramchandra Ram Reddy, Flat No.16, Gurukrupa Heights, Vadjai Mata Nagar, Makhamalabad Road, Panchvati, Nashik-422003 State of Maharashtra. PAN ABCPR6636E vs The DCIT, Central Circle-2(1), Aayakar Bhavan, Room No.630, 6 th Floor, Bodhi Tower, 548/2B, Salisbury Park, Gultekdi, Pune. State of Maharashtra PIN 411 037. Appellant Respondent For Assessee : Shri V.L. Jain For Revenue : Shri M.G. Jasnani Date of Hearing : 26.10.2023 Date of Pronouncement : 01.11.2023 ORDER PER SATBEER SINGH GODARA, J.M. : This assessee’s appeal for Assessment Year 1998- 1999 is directed against the Commissioner of Income Tax (Appeals), Pune-11, Pune’s Din & Order No.ITBA/APL/S/250/2022-23/1049151119(1), dated 27.01.2023, involving proceedings u/s.271(1)(c) of the Income Tax Act, 1961 [in short “the Act”]. 2. Heard both the parties. Case file perused. 3. Coming to the assessee’s sole substantive grievance that both the lower authorities have erred in law 2 ITA.No.721/PUN/2023 and on facts in imposing the section 271(1)(c) penalty of Rs.1,24,557/-, it emerges at the outset that the Assessing Officer’s corresponding penalty show cause notice dated 30.03.2005 issued to the taxpayer had nowhere specified or struck-off the relevant limb as to whether he had concealed particulars of his income or furnished inaccurate particulars of such an income, as the case may be. 4. Faced with the situation, we quote hon’ble jurisdictional high court’s recent Full Bench landmark decision in Mohd. Farhan A.Shaikh Vs. ACIT 434 ITR 1 (Bom) has settled the law that the above stated failure on the Assessing Officer’s part indeed vitiates the entire penal proceedings itself. We thus delete the impugned penalty for this precise reason alone. Ordered accordingly. 5. This assessee’s appeal is allowed. Order pronounced in the open Court on 01.11.2023. Sd/- Sd/- (GD PADMAHSHALI) (SATBEER SINGH GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Pune, Dated 01 st November, 2023 VBP/- 3 ITA.No.721/PUN/2023 Copy of the Order forwarded to : 1. The Appellant. 2. The Respondent. 3. The CIT(A), Pune-11, Pune. 4. The Pr. CIT (Central), Pune. 5. DR, ITAT, “B” Bench, Pune. 6. Guard File. BY ORDER, // TRUE COPY // Senior Private Secretary ITAT, Pune.