This case analysis focuses on ITA No. 4998/DEL/2019 regarding the deletion of a penalty levied against Silvertone Infrastructure Pvt. Ltd. for the assessment year 2015-16, which was pronounced on January 11, 2023.
The Income Tax Officer, Ward-23(4), New Delhi, appealed against the order of CIT(A)-8, New Delhi, which had deleted a penalty imposed on Silvertone Infrastructure Pvt. Ltd. under section 271(1)(c) of the Income Tax Act. The penalty pertained to the furnishing of inaccurate particulars of income.
The Revenue challenged the CIT(A)’s decision on several grounds, questioning whether the CIT(A) erred in law by deleting the penalty based on procedural shortcomings and whether the merits of the case justified the deletion of the penalty.
The tribunal noted that the penalty notice issued to Silvertone Infrastructure was procedurally flawed as it did not specify the exact nature of the offense (concealment of income versus furnishing inaccurate particulars), which is a requirement for a valid penalty under section 271(1)(c). This procedural error was deemed sufficient to invalidate the penalty.
The decision referenced multiple judicial precedents asserting that a penalty notice without a clear charge is invalid. Notably, the tribunal cited cases such as SSA’s Emerald Meadows and CIT Vs. Shri Samson Perinchery to support its decision. Ultimately, the tribunal upheld the CIT(A)’s order, dismissing the Revenue’s appeal and confirming the deletion of the penalty.
This case underscores the importance of adherence to procedural requirements in penalty notices under the Income Tax Act. The tribunal’s decision reinforces the principle that penalties, being quasi-criminal in nature, require clear communication of the charges to the assessee.
The final order was pronounced in open court on January 11, 2023, by the tribunal members, providing a clear precedent on handling similar cases in the future.
Deletion of Penalty in IT vs. Silvertone Infrastructure Pvt. Ltd., ITA No. 4998/DEL/2019
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