Lyka Labs Limited Vs DCIT (ITAT Mumbai)
In the matter of Lyka Labs Limited vs. DCIT, the Income Tax Appellate Tribunal (ITAT) Mumbai dealt with appeals concerning penalties levied under Section 271(1)(c) of the Income Tax Act, 1961, for Assessment Years 2010-11, 2011-12, and 2014-15. The assessee, a pharmaceutical manufacturer, challenged the orders passed by the Commissioner of Income Tax (Appeals) under Section 250, arguing that the penalty notices issued under Section 274 read with Section 271(1)(c) were defective. Specifically, the notices failed to specify whether the penalty was for concealment of income or for furnishing inaccurate particulars, a requirement mandated by legal precedents.
The Tribunal reviewed the factual matrix and found that the issue regarding the defective penalty notice was consistently raised by the assessee from the first round of appellate proceedings. The Tribunal referred to the decision of the Larger Bench of the Bombay High Court in Mohd. Farhan A. Shaikh v. CIT, which held that non-striking of irrelevant charges in the penalty notice renders the penalty proceedings invalid. The Revenue’s reliance on Veena Estate Pvt. Ltd. v. CIT was rejected, as that case involved a delayed challenge to the penalty notice not applicable to Lyka Labs’ situation, where objections were raised early and consistently.
