Kasat Prakash M (HUF) Vs ITO (ITAT Pune)
In the case of Kasat Prakash M (HUF) vs. ITO, the Income Tax Appellate Tribunal (ITAT) Pune considered an appeal for Assessment Year 2020-21 against the order of the National Faceless Appeal Centre (NFAC), dated 27 November 2023. The main contention raised by the assessee concerned the validity of the penalty proceedings under Section 270A of the Income Tax Act. The show cause notice issued by the Assessing Officer (AO) on 19 September 2022 did not specify which of the six limbs under Section 270A(9)(a) to (f) were being invoked. The assessee argued that this procedural lapse rendered the entire penalty process flawed.
The Revenue, relying on the Bombay High Court ruling in Veena Estate Pvt. Ltd. vs. CIT, contended that no prejudice had been caused to the assessee and the issue had already been settled. However, the Tribunal disagreed with this stance, referencing the Supreme Court’s judgment in NTPC Ltd. vs. CIT which affirms the Tribunal’s authority to entertain pure legal questions for the first time in appeal proceedings. The ITAT emphasized that the failure to specify the applicable clause under Section 270A(9) invalidates the penalty, aligning its position with earlier judgments such as Schneider Electric South Asia Ltd. vs. ACIT and Md. Farhan S.A. vs. ACIT.
