Del Monte Foods P. Ltd. Vs ACIT (ITAT Delhi)
In the matter abovementioned ITAT Delhi vitiated penalty proceedings after examining that non mentioning of charge for which penalty is to be levied makes the notice as much defective as non striking of irrelevant clauses in the notice. Both make the notice ambiguous and vague.
During the course of assessment proceedings, AO had made addition on account of Advances written off amounting to Rs.3,20,34,757/- and had initiated penalty proceedings u/s. 271(1)(c). Notice u/s. 274 r.w.s 271 of the Act which was in preprinted performa. The irrelevant clauses in the notice were not struck off. Hence, the notice mentioned both limbs of section 271(1)(c) of the Act i.e. “concealed the particulars of income or furnished inaccurate particulars of such income”. Non-striking off irrelevant clause in the penalty notice makes the notice ambiguous and invalid. Another notice u/s 271 (1) (c) without mentioning of any limb. Revenue argued that AO had specified the definite charge for levy of penalty u/s. 271(1)(c) and the penalty has been levied.
ITAT held that examination of first notice reveal that it is in a preprinted performa, wherein both limbs of section 271(1)(c) have been mentioned. AO didnot strike off irrelevant clauses in the preprinted performa. The omnibus notice is vague. The subsequent notice is equally ambiguous as the AO has not mentioned any of the limbs of section 271(1)(c) in the notice for which the penalty is to be levied. Non mentioning of charge for which penalty is to be levied makes the notice as much defective as non striking of irrelevant clauses in the notice. Both make the notice ambiguous and vague. Hence, the proceedings arising from defective notice are vitiated.
