SPLENDOR LANDBASE LTD.,NEW DELHI V. ACIT, CENTRAL CIRCLE- 3, NEW DELHI

ITA 6013/DEL/2017

AI Insights

The case involves M/s. Splendor Landbase Ltd., the appellant, contesting a penalty imposed by the Assistant Commissioner of Income Tax, Central Circle-3, New Delhi, under section 271(1)(c) of the Income Tax Act, 1961, for the assessment year 2011-12. The penalty was based on additions and disallowances made during the assessment proceedings, which included the disallowance of set off of losses and donations. The primary contention of the appellant was the ambiguity in the penalty notice, which was issued in a pre-printed format without striking off irrelevant clauses, leading to its challenge in the Tribunal. The Department supported the penalty, arguing that it was rightly levied following the satisfaction recorded by the Assessing Officer.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29206 (ITAT-DELHI)
• Duration Of Justice: 7 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Next Hearing Date: 26-09-2024
• Assessment Year: 2011-2012
• Appeal Filed On: 22-09-2017
• Other Referred Cases: PCIT vs. Sahara India Life Insurance Company Ltd., CIT vs. Manjunatha Cotton & Ginning Factory, Mohd. Farhan A Shaikh vs. DCIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAYA CHOUDHARY
• Assessee Lawyers: AJAY WAD HAWA
• Section: 271(1)(c); 274

Judgement Text

" आयकर अपीलीय अिधकरण िदʟी पीठ “जी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ एवं ŵी अवधेश क ुमार िमŵा, लेखाकार सद˟ क े समƗ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “G”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER & SHRI AVDHESH KUMAR MISHRA, ACCOUNTANT MEMBER आअसं.6013/िदʟी/2017 (िन.व. 2011-12) ITA No.6013/DEL/2017 (A.Y.2011-12) M/s. Splendor Landbase Ltd., Unit No. 501-511, 5th Floor, Splendor Forum, Jasola District Centre, New Delhi 110025 PAN: AAECA-3986-E ...... अपीलाथᱮ/Appellant बनाम Vs. Assistant Commissioner of Income Tax, Central Circle-3, New Delhi ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : Shri Ajay Wadhawa, Advocate Shri Praveen Kumar, Chartered Accountant Shri V K Garg, Advocate and Shri Anil Kumar Chopra, Chartered Accountant ŮितवादीȪारा/Respondent by : Ms. Jaya Choudhary, CIT(DR) सुनवाई कᳱ ितिथ/ Date of hearing : 26/09/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 25/10/2024 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-23, New Delhi (hereinafter referred to as 'the CIT(A)') 2 ITA No. 6013/Del/2017 (AY 2011-12) dated 05.09.2017, for assessment year 2011-12, confirming levy of penalty u/s. 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as 'the Act’). 2. Shri Ajay Wadhawa, appearing on behalf of the assessee submitted that during assessment proceedings, the Assessing Officer (AO) inter alia made additions/disallowances on account of; (i) set off of losses; and (ii) disallowance u/s. 37 of the Act (including disallowance of donation). In so far as disallowance of set off of losses, the assessee got partial relief from the AO in proceedings u/s. 154 of the Act. The AO initiated penalty proceedings u/s. 271(1)(c) of the Act in respect of above additions/disallowance. Notice u/s. 274 r.w.s. 271 of the Act dated 31.03.2015 was served on the assessee. The said notice is in a pre-printed performa without striking of irrelevant clauses. Non striking of irrelevant clauses makes the notice ambiguous and defective. The ld. Counsel for the assessee thus, prayed for deleting penalty levied u/s. 271(1)(c) of the Act steming from defective notice. 3. Per contra, Ms. Jaya Choudhary representing the department vehemently supported the penalty order dated 29.03.2017 and the impugned order. The ld. DR submits that penalty u/s. 271(1)(c) of the Act has been rightly levied by the AO after recording of satisfaction, she prayed for dismissing appeal of the assessee. 4. We have heard the submissions made by rival sides and have examined the orders of authorities below. The assessee has challenged penalty u/s. 271(1)(c) of the Act on account of defective notice. The ld. Counsel for the assessee has placed on record notice u/s. 274 r.w.s. 271C of the Act dated 31.03.2015 served on the assessee. A perusal of the same reveals that the notice is issued in a pre 3 ITA No. 6013/Del/2017 (AY 2011-12) printed performa, without striking off irrelevant clauses in the notice. It is an omnibus notice. 5. The Hon’ble Jurisdictional High Court in the case of PCIT vs. Sahara India Life Insurance Company Ltd. 108 taxmann.com 597 (Delhi) following the decision rendered in the case of CIT vs. Manjunatha Cotton & Ginning Factory 359 ITR 565 deleted penalty where the AO failed to clearly specify the limb of section 271(1)(c) of the Act for levy of penalty in the notice. 6. The full Bench of Hon’ble Bombay High Court in the case of Mohd. Farhan A Shaikh vs. DCIT 125 taxmann.com 253 has held that where assessment order records satisfaction for imposing penalty on one or other or both grounds mentioned in section 271(1)(c) of the Act, a defect in notice in not striking of irrelevant matter would vitiate penalty proceedings. An omnibus notice suffers from the vice of vagueness. 7. Thus, in light of facts of the case and the decisions referred above, we find merit in appeal of the assessee. The penalty proceedings are vitiated on account of defect in notice. 8. In the result, appeal of the assessee is allowed. Order pronounced in the open court on Friday the 25th day of October, 2024. Sd/- Sd/- (AVDHESH KUMAR MISHRA) (VIKAS AWASTHY) लेखाकार सद᭭य/ACCOUNTANT MEMBER ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 25/10/2024 4 ITA No. 6013/Del/2017 (AY 2011-12) 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 "