Case Law Details
CIT (Exemptions) Vs Jamnalal Bajaj Foundation (Delhi High Court)
CIT (Exemptions) vs. Jamnalal Bajaj Foundation: Delhi High Court Upholds Deletion of Penalty due to Ambiguous Notice
Introduction: In a recent case between the Commissioner of Income Tax (Exemptions) and Jamnalal Bajaj Foundation, the Delhi High Court addressed an appeal related to the Assessment Year 2009-10. The appellant sought to challenge the order dated September 3, 2021, passed by the Income Tax Appellate Tribunal (ITAT). The case revolved around a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961, with the central contention being the lack of specificity in the notice regarding the precise limb of the section under which the penalty was imposed.
Background: The respondent, Jamnalal Bajaj Foundation, had initially filed a return declaring “nil” income for the relevant year. During the scrutiny assessment, the foundation filed a revised return declaring an income of Rs. 18,87,107/-. This revision was prompted by the utilization of accumulated surplus of Rs. 20 crore for charitable purposes. The assessment was completed under Section 143(3) of the Act, resulting in a penalty under Section 271(1)(c).
Penalty Proceedings and Notice Deficiency: Penalty proceedings were initiated against the foundation, and a show-cause notice under Section 271(1)(c) was issued, dated December 19, 2011. The notice, however, did not specify whether the penalty was being imposed for concealment of income or furnishing inaccurate particulars. In response, the foundation contended that it had not concealed any facts or furnished inaccurate particulars, thus objecting to the imposition of the penalty.
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