This appeal was filed by Atul Kumar Bansal (the appellant) against the order dated 10.05.2019 passed by the Commissioner of Income Tax (Appeals)-30, New Delhi, for the assessment year 2001-02. The case was heard by the Income Tax Appellate Tribunal (ITAT), Delhi Bench “S.M.C.”, through video conferencing.
The appellant, Atul Kumar Bansal, residing at 911, Gali Inderwali, Kucha Patti Ram, Sita Ram Bazar, Delhi – 110006, with PAN AKBPB8917C, filed his return of income for the assessment year 2001-02. The case involved the initiation and levy of penalty under Section 271(1)(c) of the Income Tax Act, 1961, for assessment years 2000-01 to 2003-04.
The primary issue raised by the appellant was the lack of a specific charge in the notice issued under Section 274 r.w.s. 271(1)(c) of the Act. The notice did not specify whether it was for concealment of income or for furnishing inaccurate particulars of income. The appellant argued that this made the penalty proceedings invalid.
The appellant relied on the decision of the Hon’ble Karnataka High Court in CIT vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565 (Karn.) and the Hon’ble Supreme Court in CIT vs. SSA’s Emerald Meadows (2016) 73 taxmann.com 248 (SC), which held that the absence of a specific charge in the notice renders the penalty proceedings invalid.
The Assessing Officer (AO) had issued the penalty notice without specifying the exact nature of the default. Despite this, the CIT(A) sustained the penalty on the grounds that the appellant had accepted charging some commission on transactions.
The ITAT considered the arguments and judicial precedents presented by the appellant. The tribunal observed that the issue of non-specific notices had been addressed by the Hon’ble Bombay High Court in the case of Mr. Mohd. Farhan A. Shaikh vs. ACIT [434 ITR (1)], which held that an omnibus notice suffers from vagueness and is invalid.
The tribunal noted that the notice issued to the appellant did not strike off the irrelevant portions and failed to inform the appellant of the exact charge. Thus, the penalty order was deemed invalid. The tribunal quashed the penalty order passed under Section 271(1)(c) of the Act for the assessment years 2000-01 to 2003-04.
The appeal of Atul Kumar Bansal was allowed, with the tribunal ruling that the penalty order was invalid due to the lack of a specific charge in the notice. This decision reinforces the necessity for clear and specific charges in penalty notices under Section 271(1)(c) of the Income Tax Act.
Order pronounced in open court on 13/07/2022.
Sd/-
(C. N. Prasad)
Judicial Member
Dated: 13/07/2022
Copy forwarded to:
Assistant Registrar
ITAT, New Delhi
Atul Kumar Bansal vs DCIT, Circle-17(1), New Delhi: Appeal Against Penalty Order for AY 2001-02
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