Solitairian Buildinfra Private Limited Vs DCIT/ACIT (ITAT Delhi)
Penalty u/s 271(1)(c) Quashed – Defective Notice Without Specifying Limb Held Fatal
The Delhi ITAT allowed the assessee’s appeal and quashed the penalty of ₹5.45 lakh levied under Section 271(1)(c) on the ground that the penalty notice was defective and invalid in law. The Tribunal found that the Assessing Officer had issued the notice under Section 274 read with Section 271(1)(c) by mentioning both limbs – “concealment of income” and “furnishing of inaccurate particulars” – without striking off the inapplicable portion, thereby failing to specify the exact charge against the assessee.
Relying on binding precedents including the Supreme Court decision in SSA’s Emerald Meadows and Delhi High Court rulings in Sahara India Life Insurance Co. Ltd., Blackrock Securities (P.) Ltd. and Gracious Projects (P.) Ltd., the Tribunal held that such ambiguous notices vitiate the entire penalty proceedings for want of jurisdiction and violation of principles of natural justice.
Since the foundational notice itself was invalid, the penalty order was held void ab initio and was deleted in full, without examining the merits of the additions. The appeal was accordingly allowed.
FULL TEXT OF THE ORDER OF ITAT DELHI
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-3, Noida, [hereinafter referred to as “(Ld.CIT(A)”], vide order dated 27.04.2023 pertaining to A.Y. 2016-17 and arises out of the penalty order dated 25-03-2023 passed by the Assessing Officer under Section 271(1)(c) of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’].
