Case Law Details
Pioneer Town Planners Pvt. Ltd Vs ACIT (ITAT Delhi)
It has been clearly stated that notice issued u/s 271(1)(c) is omnibus notice without specifying the specific charge upon the assessee as to whether it is for concealment of income or furnishing of inaccurate particulars of income. In this regard, we may gainfully refer to the order of the jurisdictional High Court in the case of Pr. CIT vs Sahara India Life Insurance Company Ltd. in CM Appeal No.19863/2019 vide order darted 02.08.2019 and others, the Hon’ble High Court has laid down the following exposition:-
“21. The Respondent had challenged the upholding of the penalty imposed under section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT vs Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of income or for furnishing of inaccurate particulars of income. The Karnataka High Court had followed the above judgment in the subsequent order in Commissioner of Income Tax v. SSA’s Emerald Meadows (2016) 73 Taxman.com 241(Kar.), the appeal against which was dismissed by the Supreme Court of India in SLP No.11485 of 2016 by order dated 05th August, 2016.”
Thus, from the above, it is evident that non-specification of the limb of the notice would render the penalty proceedings invalid. Accordingly, respectfully following the precedent, we set-aside the orders of the authorities below holding that notice u/s 271(1)(c) is omnibus notice, thus defective which goes to the root of the matter. Accordingly the appeal of the assessee stands allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
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