PCIT Vs Corteva Agriscience Pvt. Ltd. (Delhi High Court)
Delhi High Court order on Whether penalty u/s 271(1)(c) is valid when the notice issued by AO in standard printed form does not clearly state the exact charge (concealment or furnishing inaccurate particulars)
Delhi High Court delivered a judgment on four identical appeals filed by the Principal Commissioner of Income Tax (PCIT) against Corteva Agriscience Pvt. Ltd. (formerly known as M/s PHI Seeds Private Limited). The appeals related to the Assessment Years (AYs) 2002-03, 2003-04, 2005-06, and 2010-11. The central issue was the validity of a penalty imposed under Section 271(1)(c) of the Income Tax Act, 1961. The Income Tax Appellate Tribunal (ITAT) had previously set aside this penalty, and the Revenue challenged that decision.
Factual Background
For the AY 2002-03, the assessee, a company engaged in agriculture-related activities, filed its return of income. The Assessing Officer (AO) completed the assessment under Section 143(3), making an addition to the declared income and initiating penalty proceedings under Section 271(1)(c). The AO subsequently imposed a penalty of ₹2,49,97,905 for “furnishing inaccurate particulars.”
The assessee challenged the penalty order before the Commissioner of Income Tax (Appeals) [CIT(A)], who upheld the penalty. The matter then moved to the ITAT. Before the ITAT, the assessee’s main argument was that the penalty notice issued by the AO was invalid and legally flawed. The notice was a standard, printed form that did not specify whether the penalty proceedings were initiated for ‘concealment of income’ or ‘furnishing inaccurate particulars of income’, the two distinct limbs of Section 271(1)(c).
