DCIT Vs R. Elangovan (ITAT Chennai)
Material Facts: The Revenue filed an appeal and the assessee filed a cross objection against the order of the Commissioner of Income Tax (Appeals)-18, Chennai dated 23.01.2017. The Revenue’s appeal, filed with a delay of two days, was admitted after condonation of delay. In the cross objection, the assessee challenged the levy of penalty on the ground that the notice issued under Section 274 read with Section 271AAB of the Income-tax Act, 1961 was vague and invalid. Since the assessee questioned the validity of the initiation of penalty proceedings, the Tribunal considered this issue first.
Procedural History:The Commissioner (Appeals) had reduced the penalty levied under Section 271AAB from 30% to 10% but had not adjudicated the assessee’s ground challenging the validity of the penalty notice. The Revenue appealed against the reduction of penalty, while the assessee filed a cross objection seeking complete quashing of the penalty on the basis of the defective notice.
Legal Issues
The Tribunal considered:
- Whether the notice issued under Section 274 read with Section 271AAB was vague and invalid.
- Whether failure to specify the exact charge in the notice rendered the penalty proceedings invalid.
- Whether the penalty imposed under Section 271AAB could survive if the initiation of penalty proceedings was based on an invalid notice.
Relevant Statutory Provisions
