M/S G.S.AUTOCOMP PVT.LTD.,LUDHIANA V. ACIT-CC-II, LUDHIANA

ITA 76/CHANDI/2020

AI Insights

The case involves M/s G.S. Auto Comp Pvt. Ltd., the appellant, who appealed against the order of the Commissioner of Income Tax (Appeals) which confirmed a penalty imposed by the Assessing Officer under section 271AAB of the Income Tax Act, 1961 for the assessment year 2015-16. The primary contention was the alleged defectiveness of the show cause notice issued by the Assessing Officer, which did not clearly specify the charges or violations that warranted the penalty. The Tribunal examined the notice and concluded that it was indeed defective, leading to the decision to delete the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 772266 (ITAT-CHANDIGARH)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-08-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: VIVEK VARDHAN
• Assessee Lawyers: P.K.GOEL
• Section: 271(1)(c)

Judgement Text

"आयकर अपीलȣय अͬधकरण,चÖडीगढ़ Ûयायपीठ, चÖडीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCH, ‘A’ CHANDIGARH BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT AND SHRI MANOJ KUMAR AGGARWAL, ACCOUNTANT MEMBER आयकर अपील सं./ ITA No. 76/CHD/2020 Ǔनधा[रण वष[ / Assessment Year: 2015-16 M/s G.S. Auto Comp Pvt. Ltd., G.S.Estate, G.T.Road, Dhandari Kalan, Ludhiana. Vs The ACIT, Central Circle-II, Ludhiana. èथायी लेखा सं./PAN NO: AACCG5774E अपीलाथȸ/Appellant Ĥ×यथȸ/Respondent Assessee by : Shri P.K.Goel, CA Revenue by : Shri Vivek Vardhan, Addl. CIT Sr.DR Date of Hearing : 21.08.2025 Date of Pronouncement : 27.08.2025 HYBRID HEARING O R D E R PER RAJPAL YADAV, VP The assessee is in appeal before the Tribunal against the order of the ld. Commissioner of Income Tax (Appeals) [in short ‘the CIT (A)’] dated 04.12.2019 passed for assessment year 2015-16. 2. Though the assessee has taken six grounds of appeal but its grievance revolves around a single issue, namely, ld. CIT Printed from counselvise.com ITA No.76/CHD/2020 A.Y.2015-16 2 (Appeals) has erred in confirming the penalty partly imposed u/s 271AAB of the Income Tax Act, 1961. 3. The ld. counsel for the assessee, at the very outset drew our attention towards the copy of a notice issued by the AO vide which explanation of the assessee was called for as to why it be not visited with penalty. He drew our attention to page 12 of the Paper Book whereby copy of the notice dated 31.12.2016 has been placed. We deem it appropriate to take note of this notice, which reads as under : Printed from counselvise.com ITA No.76/CHD/2020 A.Y.2015-16 3 4. The ld. counsel for the assessee submitted that it is totally defective and does not spell out a specific charge against the assessee. Hence, this penalty ought not be levied upon the assessee. 5. With the assistance of ld. Representative, we have gone through the record carefully. We find that ld. CIT (Appeals) has reduced the penalty from Rs.30.30 lacs to Rs.10.10 lacs, but failed to adjudicate the legal plea raised by the assessee as has been raised before us. A perusal of the above Show Cause Notice would reveal that it does not provide any charge against the assessee, for example, firstly it has been observed in this notice that assessee has concealed particulars of income and furnished inaccurate particulars of such income. Now, this charge could be only for visiting an assessee with penalty u/s 271(1)(c) of the Act. In last paragraph, ld. AO has directed the assessee to appear before him and explain as to why it be not visited with penalty u/s 274 of the Income Tax Act. Section 274 only provides a procedure vide which an opportunity of hearing is required to be given. It is not a provision for charging an assessee with penalty. In the last Printed from counselvise.com ITA No.76/CHD/2020 A.Y.2015-16 4 line, ld. AO has simply observed as to why order u/s 271AAB be not passed upon the assessee. If Section 271AAB is being perused, then it has three components on whose violation, assessee can be visited with penalty but AO has not specified any of the violations in this Show Cause Notice qua which explanation of the assessee was invited. Therefore, this notice is a defective notice and on the basis of this notice, no penalty can be imposed upon the assessee. Accordingly, we allow the appeal of the assessee and delete the penalty. 6. In the result, appeal is allowed. Order pronounced on 27.08.2025. Sd/- Sd/- (MANOJ KUMAR AGGARWAL) (RAJPAL YADAV) ACCOUNTANT MEMBER VICE PRESIDENT “Poonam” आदेश कȧ ĤǓतͧलͪप अĒेͪषत/ Copy of the order forwarded to : 1. अपीलाथȸ/ The Appellant 2. Ĥ×यथȸ/ The Respondent 3. आयकर आयुÈत/ CIT 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय आͬधकरण, चÖडीगढ़/ DR, ITAT, CHANDIGARH 5. गाड[ फाईल/ Guard File सहायक पंजीकार/ Assistant Registrar Printed from counselvise.com "