Case Law Details
Ansal Properties & Infrastructure Ltd Vs ACIT (ITAT Delhi)
Penalty not sustainable if penalty notice is omnibus and the charge has not been specified
Assessee has stated that there is no striking off of irrelevant part in the notice u/s 274 rws 271(1) (c). Copy of the notice 274 is attached in paper book at page It is evident that the same is an omnibus notice without identifying the charge by striking off of the limb which is not applicable. In such circumstances, the penalty levied cannot be sustained. For this proposition, we rely upon the full bench decision of Hon’ble Bombay High Court in the case of Md. Farhan A. Shaikh vs DCIT 125 taxmann.com 253 (Bom). Similar proposition was laid down in Pr. CIT vs Sahara India Life Insurance Co. Ltd. [2021] 432 ITR 84 (Del.) Thus, since the penalty notice is omnibus and the charge has not been specified, the penalty is not sustainable.
No penalty for disallowance due to dispute with respect to nature of expenses
It is noted that the issue on which penalty has been finally levied is disallowance of expenditure in connection with QIP and disallowance of claim of deduction u/s 80-IB on the ground of allocation of interest expenses. It cannot be said that there is concealment of income or furnishing of inaccurate particulars of income on the issue on which the penalty has been levied. All due disclosures are there. Primary dispute is with respect of nature of expenses i.e. revenue vs capital. These particulars have been completely disclosed in Income Tax Return. Hence if the claim is not accepted merely on the ground of the same being classified capital by Revenue authorities, in such as a situation the case of Reliance Petro products (2010) 322 ITR 158 (SC) comes to the rescue of the In this case it was held that mere disallowance of a claim which is not ex-facie bogus cannot lead to levy of penalty. In these circumstances, in our considered opinion, the assessee deserves to succeed and the penalty levied is hereby deleted.
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