LATE ME. DAVINDER KUMAR,NEW DELHI V. DCIT, CENTRAL CIRCLE-15, NEW DELHI

ITA 2540/DEL/2024

AI Insights

The case involves an appeal by the assessee, Late Mr. Davinder Kumar, against the penalty imposed by the Deputy Commissioner of Income Tax, Central Circle-15, New Delhi, which was upheld by the Commissioner of Income Tax (Appeals)-29, New Delhi. The penalty was levied under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2012-13. The primary contention in the appeal was the validity of the notice issued under sections 274 r.w.s 271 of the Act, which the assessee argued was defective as it contained irrelevant contents and was issued in a mechanical manner without striking off the irrelevant parts. The Tribunal admitted the additional ground of appeal and found the notice to be vague and defective, leading to the setting aside of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 312707 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2012-2013
• Other Referred Cases: Mohd. Farhan A. Shaikh vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SANJAY KUMAR
• Assessee Lawyers: RAJIV KHANDELWAL; CHARTERED ACCOUNTANT
• Keywords: Set aside
• Section: 271(1)(c)

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं.2540/िदʟी/2024 (िन.व. 2012-13) ITA No.2540/DEL/2024 (A.Y.2012-13) Late Mr. Davinder Kumar, (Through Geeta Kumar), D-1075, New Friends Colony, New Delhi PAN: ACHPK-3992-J ...... अपीलाथᱮ/Appellant बनाम Vs. Deputy Commissioner of Income Tax, Central Circle-15, New Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Rajiv Khandelwal, Chartered Accountant and Shri Jaind Kumar Jaiswal, Advocate ŮितवादीȪारा/Respondent by : Shri Sanjay Kumar, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 03.02.2025 घोषणा कᳱ ितिथ/ Date of pronouncement : : 29.04.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-29, New Delhi (hereinafter referred to as 'the CIT(A)'), dated 30.11.2023, for assessment year 2012-13 confirming levy of penalty u/s.271(1)(c) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’). 3. Shri Rajiv Khandelwal, appearing on behalf of the assessee submits that penalty of Rs.1,78,248/- u/s. 271(1)(c) of the Act has been levied by the Assessing Officer (AO) vide order dated 21.08.2014. The CIT(A) vide impugned order in ex- parte proceedings has upheld penalty order. The assessee vide application dated 31.01.2025 has raised additional ground of appeal assailing validity of notice dated 13.03.2014 issued u/s. 274 r.w.s 271 of the Act being defective.. He placed on 2 ITA No.2540/DEL/2024 (AY 2012-13) record copy of the notice dated 13.03.2014 to substantiate that the irrelevant contents of notice have not been struck off, thus making the notice defective. 3. Per contra, Shri Sanjay Kumar representing the department strongly opposed additional ground of appeal raised by the assessee at this stage and prayed for upholding the penalty levied u/s. 271(1)(c) of the Act. He further pointed that the assessessee failed to respond to the notices issued by the CIT(A). 4. Both sides heard. The assessee by way of additional ground of appeal has assailed validity of penalty notice issued u/s. 274 r.w.s. 271 of the Act as the same has been issued in a mechanical manner. The additional ground raised by the assessee vide application dated 31.01.2025 reads as under:- “The appellant contends that on the facts and in the circumstances of the case and in law, the impugned notice under section 274 r.w.s. 271 of the Act is issued in a mechanical manner by the Assessing Officer and hence, the issuance of the impugned notice under section 274 r.w.s 271 is invalid and bad in law and consequently, the penalty order is also bad in law and needs to be quashed.” The additional ground of appeal is purely legal and goes to the root of validity of penalty proceedings. No fresh evidence is required to be adduced for adjudicating additional ground. Hence, the additional ground raised by the assessee is admitted for adjudication. 5. Since, in the additional ground of appeal legal issue is raised, the same is taken up first for adjudication. The notice issued u/s. 274 r.w.s 271 of the Act which is subject matter of dispute is reproduced herein under: 3 ITA No.2540/DEL/2024 (AY 2012-13) 4 ITA No.2540/DEL/2024 (AY 2012-13) 6. A bare perusal of above notice shows that the same is omnibus notice in a preprinted performa. Though, the AO has tick marked in the notice, however, it is not clearly emanating from the notice as to whether penalty u/s. 271(1)(c) of the Act is levied on the charge of ‘concealment of particulars of income’ or ‘furnishing inaccurate particulars of income’ or on both limbs of section 271(1)(c) of the Act. This makes the notice vague and defective. 7. A perusal of the assessment order reveals that the AO while recording satisfaction for levy of penalty u/s. 271(1)(c) of the Act has failed to mention the charge i.e. whether satisfaction for levy of penalty u/s.271(1)(c) of the Act is recorded for, ‘concealment of particulars of income’ or ‘furnishing inaccurate particulars’ or ‘concealment of particulars of income and furnishing inaccurate particulars’. Thus, no charge u/s. 271(1)(c) of the Act has been mentioned by the AO while recording satisfaction. The penalty is liable to be deleted on the ground of ambiguity in recording of satisfaction, as well. 8. As pointed earlier, ambiguity in mind of the AO regarding charge on which penalty is to be levied u/s. 271(1)(c)of the Act is reflected in notice as well. The AO has not struck off irrelevant matter in the notice issued in pre printed performa. The Full Bench of Hon’ble Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. DCIT reported as 125 taxmann.com 253 has held that where omnibus notice has been issued and irrelevant matter in the notice has not been struck off, the notice is defective. No penalty can be levied on such defective notice. Thus, in facts of the case, I hold that non striking off irrelevant matter by the AO has rendered the notice defective, hence, penalty proceedings are vitiated. 5 ITA No.2540/DEL/2024 (AY 2012-13) 9. Since, the assessee gets relief on the additional ground of appeal, the grounds of appeal assailing levy of penalty on merits have become academic, thus, not deliberated upon. 10. In the result, impugned order is set aside and appeal is allowed. Order pronounced in the open court on Tuesday the 29th day of April, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 29.04.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "