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
This appeal by the assessee is directed against the order of ld. CIT (Appeals)-38, New Delhi, dated 15.05.2019 and pertains to Assessment Year 2012-13.
2. The grounds of appeal read as under:-
1. That on the facts and in the circumstances of the case and in law, ld. CIT-A erred in sustaining the order passed by Ld. AO u/s 271(1)(c)
1.1 That Ld. CIT Appeals has not considered the fact that the Order u/s 250 against the assessment order 143(3) still pending before CIT (Appeals) as Hon’ble ITAT has remand back the order U/s 250
1.2 That Ld. CIT Appeals has not given the opportunity of being heard while not considering the order of ITAT about the remand back of the appeal order U/s 250.
3. The Ld. Counsel for the assessee has filed an addition ground relating to the defective notice. The said ground reads as under:-
“Sub: Request for filing of Additional ground(s)
The captioned appeal is preferred against the order dated 15.05.2019 passed by Commissioner of Income Tax-38 under section 250 of the Income Tax Act, 1961 for AY 2012-13. It is respectfully submitted that the impugned notice issued by the Deputy Commissioner of Income Tax, Circle 19(2) is without jurisdiction and is therefore, illegal & bad in law. Since the issue is purely legal based on facts already on record, the appellant may be allowed to raise the following additional ground in the interest of natural justice: –
Additional Ground(s):
“That, in view of the facts and circumstances of the case and in law, the impugned notice dated 17.02.2015 issued by Deputy Commissioner of Income Tax, Circle 19(2) under Section 274 read with section 271 of the Act is defective and hence, A0 has not assumed valid jurisdiction. Therefore, the penalty proceedings are liable to be dropped”
The relevant facts are already on record and no new fact is required to be investigated. The above noted ground goes to the root of the matter. It is therefore humbly requested that the same may kindly be admitted and adjudicated. Reliance is placed on the decision of Hon’ble Supreme Court in the case NTPC 229 ITR 383 (SC).”
4. Furthermore, the ld. Counsel for the assessee has attached a copy of the notice and he has stated at bar that this was notice received by the assessee from the AO wherein the specific limb has not been identified as to whether the charge is for concealment of income or furnishing of inaccurate particulars of income. The Ld. Counsel for the assessee submitted that this issue stands squarely covered in favour of the assessee by several case laws including CIT vs SSA’S Emerald Meadows [2016] 242 taxman 180(SC) and Pr. CIT vs Sahara India Life Insurance Company Ltd. in ITA No.475 of 2019 (Delhi High Court).
5. Upon careful consideration and hearing both the parties, we admit the aforesaid additional ground. In the ground, 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.”
6. 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.
7. In the result, this appeal of the assessee is allowed.
Order pronounced in the open court on 16th February, 2023.
