ACIT Vs Sahara India Commercial Corporation Limited (ITAT Delhi)
Omnibus Penalty Notice & time-barred reopening sink Revenue’s case; Penalty Notices without specific charge is Vague – Borrowed Investigation Report & Defective Notice Doom Revenue Appeals – Time-barred reopening quashed
Delhi ITAT has deleted substantial penalties u/s 271(1)(c) & struck down a reassessment initiated beyond four years, holding both actions to be legally unsustainable. The matter involved multiple years where the Revenue’s appeals & Assessee’s cross objections were heard together & decided by a common order.
For AYs 2010-11, 2013-14 & 2014-15, the penalty proceedings arose from assessments completed u/s 143(3)/153A. AO had levied penalty @100% of the tax sought to be evaded (₹14.81 crore for AY 2010-11) alleging concealment of income. Assessee challenged the very foundation of the penalty on jurisdictional grounds, contending that the notices issued u/s 274 r.w.s. 271(1)(c) were omnibus & vague, as they failed to specify whether the penalty was for “concealment of income” or for “furnishing inaccurate particulars.” It was argued that such non-striking off of the irrelevant portion in the notice is a fatal defect, which cannot be cured by mentioning the charge in the assessment or penalty order. Reliance was placed on decisions which have categorically held that the assessee must be informed of the precise grounds for penalty only through the statutory notice & that an omnibus notice suffers from the vice of vagueness.
