LATE MR. DAVINDER KUMAR THROUGH GEETA KUMAR,NEW DELHI V. DCIT CENTRAL CIRCLE-15, NEW DELHI

ITA 2538/DEL/2024

AI Insights

The case involves four appeals by the assessee, Late Mr. Davinder Kumar, against the orders of the Commissioner of Income Tax (Appeals)-29, New Delhi, for the assessment years 2008-09 to 2011-12. The appeals were directed against the levy of penalty under section 271(1)(c) of the Income Tax Act, 1961, which was confirmed by the CIT(A). The main contention of the assessee was the mechanical and defective issuance of the penalty notice under section 274 read with section 271 of the Act. The Tribunal admitted the additional ground of appeal regarding the validity of the notice and found it to be vague and defective, leading to the setting aside of the penalty orders.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298849 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-02-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2010-2011
• 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); 274

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.2536 to 2539/िदʟी/2024 (िन.व. 2008-09 to 2011-12) ITA Nos.2536 to 2539/DEL/2024 (A.Ys.2008-09 to 2011-12) 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 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 : : 12.02.2025 आदेश/ORDER PER VIKAS AWASTHY, JM: These four appeals by the assessee are directed against the orders of Commissioner of Income Tax (Appeals)-29, New Delhi (hereinafter referred to as 'the CIT(A)'), for assessment years 2008-09 to 2011-12 respectively confirming levy of penalty u/s.271(1)(c) of the Income Tax Act,1961(hereinafter referred to as ‘the Act’). All four impugned orders are of even date i.e. 30.11.2023. 2. For the sake of convenience the appeals are taken up adjudication in seriatim of assessment years. ITA No. 2536/Del/2024 for AY 2008-09 3. Shri Rajiv Khandelwal, appearing on behalf of the assessee submits that penalty of Rs.8,36,195/- 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- 2 ITA Nos.2536 to 2539/DEL/2024 (AYs 2008-09 to 2011-12) parte proceedings has upheld penalty order. The assessee vide application dated 31.01.2025 has raised additional ground of appeal assailing validity of notice issued u/s. 274 r.w.s 271 of the Act stating it to be issued in mechanical manner. He placed on record copy of the notice dated 13.03.2014 to substantiate that the irrelevant contents of notice have not been struck off, thus making notice defective. 3. Per contra, Shri Sanjay Kumar representing the department strongly opposed the 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 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.” 5. A perusal of additional ground of appeal reveals that the same 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. 6. Before, I proceed to decide the issues raised in grounds of appeal, the additional ground of appeal raising legal issue 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 Nos.2536 to 2539/DEL/2024 (AYs 2008-09 to 2011-12) 7. A 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 4 ITA Nos.2536 to 2539/DEL/2024 (AYs 2008-09 to 2011-12) inaccurate particulars of income’ or on both limbs of section 271(1)(c) of the Act. This makes the notice vague and defective. 8. A further 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 as specified u/s. 271(1)(c) of the Act has been invoked by the AO while recording satisfaction. The penalty is liable to be deleted on the ground of ambiguity in recording of satisfaction. 9. 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 notices 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. 10. In the result, impugned order is set aside and appeal is allowed. 11. 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. 5 ITA Nos.2536 to 2539/DEL/2024 (AYs 2008-09 to 2011-12) ITA Nos. 2537 to 2539/Del/2024 for AYs 2009-10 to 2011-12 12. Both sides unanimously stated that facts in subsequent assessment years are identical to AY 2008-09. Hence, the submissions made in AY 2008-09 would equally apply to subsequent assessment years under appeal. 13. The assessee in these assessment years have raised identical additional ground. I find that the manner of recording of satisfaction in the subsequent assessment years under appeal is identical to the recording of satisfaction as was in AY 2008-09 and the notices issued u/s. 274 r.w.s. 271 of the Act in AYs 2009-10, 2010-11 & 2011-12 are identical to the notice issued u/s. 274 r.w.s. 271 of the Act for AY 2008-09. In fact the date of notices in all three subsequent assessment years under appeal is also the same. Except for the change in assessment year there is absolutely no difference in the contents of the notices. The notices are verbatim. On even facts, the findings given while adjudicating appeal of the assessee for AY 2008-09 would mutatis mutandis apply to the subsequent assessment years under appeal. For parity of reasons, the appeals for AYs 2009-10, 2010-11 & 2011-12 are allowed. 14. To sum up, appeals of the assessee for AYs 2008-09, 2009-10, 2010-11 & 2011-12 are allowed. Order pronounced in the open court on Wednesday the 12th day of February, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 12.02.2025 NV/- 6 ITA Nos.2536 to 2539/DEL/2024 (AYs 2008-09 to 2011-12) ᮧि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 "