DCIT Vs Honeywell Automation India Ltd. (ITAT Pune)
Defective 271(1)(c) Notice Fatal -Penalty Notices Without Specific Charge Invalid -General Format SCN Not Sustainable
Pune Tribunal considered the validity of penalty u/s 271(1)(c) imposed through a standard-format notice without striking off the inapplicable limb.
Assessee, engaged in automation systems, was assessed u/s 143(3) r.w.s. 144C(13) wherein additions were made for TP adjustment, denial of 10A/10AA relief, interest on refund & mismatch with Form 26AS. Penalty proceedings u/s 271(1)(c) were initiated through notices dated 30.01.2015 & 17.03.2020, both in general format mentioning “concealment of income & furnishing inaccurate particulars” without specifying the exact charge. AO finally levied 100% penalty on sustained additions.
CIT(A) deleted penalty, holding that Assessee had disclosed material facts & differences were only due to opinion/adjustments. Revenue appealed.
Before Tribunal, Assessee raised cross objection arguing that penalty notices were defective & invalid, relying on Bombay HC ruling in Mohd. Farhan A. Shaikh v. DCIT (2021) 280 Taxman 334 and SC dismissal in CIT v. SSA’s Emerald Meadows (2016). Tribunal noted that both original & subsequent SCNs failed to strike off inapplicable limb, making initiation itself void. It also cited SC ruling in CIT (LTU) v. SBI (2024) 302 Taxman 365, which reaffirmed Manjunatha Cotton & Ginning Factory principles. Accordingly, Tribunal upheld deletion of penalty, dismissed Revenue’s appeal & partly allowed Assessee’s CO by quashing penalty ab initio.
