Keshav Bhardwaj Vs DCIT (ITAT Delhi)
Delhi ITAT Deletes Penalty as AO Failed to Specify Charge in Section 271(1)(c) Notice
The Delhi ITAT deleted the penalty of ₹29.90 lakh levied under section 271(1)(c), holding that the penalty notice issued under section 274 was invalid as the Assessing Officer failed to specify whether the penalty was for concealment of income or furnishing inaccurate particulars of income. The assessee had revised the return to offer long-term capital gains from sale of shares, which was accepted in the assessment.
The Tribunal observed that the Assessing Officer had used a standard printed notice without striking off the irrelevant limb and had also recorded inconsistent satisfaction in the assessment and penalty orders, reflecting complete non-application of mind. Such a vague notice deprived the assessee of a proper opportunity to defend the specific charge.
Relying on the decisions of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory and the Supreme Court in SSA’s Emerald Meadows and Dilip N. Shroff, the Tribunal held that a valid penalty notice must clearly specify the exact limb of section 271(1)(c) invoked. Since this mandatory requirement was not fulfilled, the penalty was held to be unsustainable and was deleted. The assessee’s appeal was accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
