SPECTRIS TECHNOLOGIES PVT. LTD.,GURGAON V. ITO WARD - 24(1), NEW DELHI

ITA 780/DEL/2020

AI Insights

The case involves Spectris Technologies Pvt. Ltd., which appealed against the penalty imposed by the Income Tax Officer (ITO), Ward-24(1), New Delhi, under section 271(1)(c) of the Income Tax Act, 1961. The penalty was initially upheld by the Commissioner of Income-tax (Appeals)-XXV, New Delhi. The primary contention in the appeal was the lack of specificity in the penalty notice regarding the exact nature of the default—whether it was for concealment of income or for furnishing inaccurate particulars of income. The Tribunal, referencing several High Court judgments, concluded that the notice did not meet the legal requirements for imposing a penalty under the specified sections, leading to the quashing of the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 23808 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2009-2010
• Other Referred Cases: CIT vs. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Kar), Mr. Mohd. Farhan A. Shaikh vs. ACIT, 434 ITR 1 (Bom), PCIT vs. Sahara India Life Insurance Co. Ltd., ITA No.475 of 2019, CIT vs. SSA's Emerald Meadows, 73 taxmann.com 241 (Kar)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: TARANDEEP SINGH
• Keywords: Initiation of penalty proceedings
• Section: 271(1)(c); 274; 73

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES : G : NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI ANUBHAV SHARMA, JUDICIAL MEMBER ITA No.780/Del/2020 Assessment Year: 2009-10 Spectris Technologies Pvt. Ltd., Unit No.P 701-705, 7th Floor, Block C, JMD Megapolis, Sohna Road, Sector-48, Gurgaon, Haryana – 122 001. PAN: AAGCS6654R Vs ITO, Ward-24(1), New Delhi. (Appellant) (Respondent) Assessee by : Shri Tarandeep Singh, Advocate Revenue by : Shri Sahil Kumar Bansal, Sr.DR Date of Hearing : 27.01.2025 Date of Pronouncement : 31.01.2025 ORDER PER ANUBHAV SHARMA, JM: This appeal is preferred by the Assessee against the order dated 16.12.2019 of the Commissioner of Income-tax (Appeals)-XXV, New Delhi (hereinafter referred as Ld. First Appellate Authority or in short Ld. ‘FAA’) in Appeals No. 10296/18-19 arising out of the appeal before it against the order dated 23.03.2017 passed u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter ITA No.780/Del/2020 2 referred to as ‘the Act’) by the ITO, Ward 24(1), New Delhi (hereinafter referred to as the Ld. AO). 2. On hearing both the sides, it transpires that the assessee is primarily stressing on the ground No.4 which is reproduced below:- “4. That on the facts and circumstances of the case and in law, the ld. CIT(A) has erred in upholding the penalty under section 271(1)(c) of the Act without appreciating that no specific charge has been brought in the impugned penalty order by Ld. AO against the Appellant for initiation and subsequent levy of penalty.” 3. The ld. AR has submitted that the notice issued u/s 274 of the Act is not in accordance with the law and, accordingly, the impugned penalty order is not sustainable. 4. In this context, as we go through the copy of the assessment order placed before us, we find that in regard to the impugned adjustments and disallowance in the assessment order, it was mentioned that the assessee has ‘concealed income by furnishing inaccurate particulars of income’ and that was the foundation of initiation of penalty proceedings notice u/s 271(1)(c) of the Act. As we go through the impugned order u/s 271(1)(c) of the Act dated 23.03.2017, we find the ld. AO has mentioned of issuance of notice dated 11.04.2013. Copy of that notice is on record and the same shows that as for the purpose of section 271(1)(c), it is not specifically mentioned as to under which limb of the default for which penalty is leviable, the assessee was called on to reply and face penalty proceedings. In this context, the law is now quite settled ITA No.780/Del/2020 3 that the penalty proceedings should be based on a notice wherein it should be specifically mentioned as to penalty proceedings in regard to concealment of income or for furnishing inaccurate particulars of income. We find that even there is no striking of the irrelevant part while issuing notice u/s 274 of the Act. Thus, the penalty notices are not sustainable under law and reliance in this regard is placed on the judgements of the Hon’ble Karnataka High Court in the case of CIT vs. Manjunatha Cotton and Ginning Factory, 359 ITR 565 (Kar); Hon’ble Bombay High Court in the case of Mr. Mohd. Farhan A. Shaikh vs. ACIT, 434 ITR 1 (Bom); and Hon’ble Delhi High Court in the case of PCIT vs. Sahara India Life Insurance Co. Ltd., ITA No.475 of 2019 and the aforesaid principles have been reiterated in the case of CIT vs. SSA’s Emerald Meadows reported in 73 taxmann.com 241 (Kar.). 5. In the light of the aforesaid, we sustain ground No.4 and quash the penalty proceedings and the consequent orders upon the same. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 31.01.2025. Sd/- Sd/- (SHAMIM YAHYA) (ANUBHAV SHARMA) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 31st January, 2025. dk ITA No.780/Del/2020 4 Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asstt. Registrar, ITAT, New Delhi "