This case summary reviews the appeal filed by Tilak Raj Bansal against the Income Tax Officer, Ward 34(1), Delhi, concerning penalties imposed for the assessment year 2010-11, which were contested due to the improper service of notice.
The appeals, ITA Nos.2497 & 2498/Del/2022, were heard together due to their interconnected nature concerning both quantum and penalty proceedings. The penalties were questioned on the basis of both procedural irregularities and substantive issues with the income assessment.
The main issues revolved around the service of notice, the proper conduct of assessment proceedings, and the legitimacy of penalties imposed based on flawed processes. Bansal argued that penalties were improperly levied, as notices were either not served or were returned, impacting his ability to respond and contest the charges adequately.
The Income Tax Appellate Tribunal, led by Shri Kul Bharat, provided a critical analysis of the procedural lapses in notice service and addressed the substantive claims regarding the penalties. It was found that the penalties were not justifiable under the circumstances, leading to their cancellation. The tribunal emphasized the importance of adhering to procedural fairness, especially in penalty proceedings.
This case underlines the critical need for tax authorities to follow due process, particularly in the service of notices. It also highlights the taxpayer’s right to a fair hearing, which is fundamental in contesting penalties and assessments. The decision serves as a reminder of the judiciary’s role in ensuring justice and adherence to the rule of law in tax matters.
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