Umesh Pharmaceuticals (P) Ltd. v. ACIT

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The Tax Publishers2022 TaxPub(DT) 1218 (Del-Trib)

INCOME TAX ACT, 1961

Section 271(1)(c)

Since notices under section 274 read with section 271(1)(c) were issued without striking off the irrelevant portion of the limb and AO failed to intimate assessee the relevant limb and charge for which the notices were issued, therefore, penalty orders passed under section 271(1)(c) were quashed.

Penalty under section 271(1)(c) - Notice issued by AO without specifying grounds of penalty - Defective notice -

Assessee's case was that penalty levied under section 271(1)(c) was void as notice under section 274 read with section 271 was bad and defective as it is issued without deleting the appropriate clause under which penalty was proposed to be imposed is either for filing of inaccurate particulars of income or concealment of particulars of income and as such, the notice is not sustainable and not curable.Held: Notices under section 274 read with section 271(l) (c) were issued without striking off the irrelevant portion of the limb and AO failed to intimate assessee the relevant limb and charge for which the notices were issued. Thus, following the full Bench decision of Bombay High Court in Mr. Mohd. Farhan A. Shaikh v. Dy. CIT (2021) 434 ITR 1 (Bom-HC) (FB) : 2021 TaxPub(DT) 1503 (Bom-HC) (FB), penalty order passed under section 271(1)(c) by AO was bad in law and accordingly the penalty orders passed under section 271(1) (c) for assessment years 2007-08 to 2012-13 were quashed. Thus, penalty notice under section 271(1)(c) was liable to be deleted.

Followed:Rajesh Kumar & Ors. v. Dy. CIT & Ors. 2006 TaxPub(DT) 1850 (SC), CIT v. Varas International (Private) Limited (2006) 284 ITR 80 (SC) : 2006 TaxPub(DT) 1456 (SC), National Thermal Power Company Limited v. CIT (1998) 229 ITR 383 (SC) : 1998 TaxPub(DT) 342 (SC), State of Orissa v. Dr. (Miss) Binapani DEI & Ors. 1967 SCR (2) 625, Mr. Mohd. Farhan A. Shaikh v. Dy. CIT (2021) 434 ITR 1 (Bom) (FB) : 2021 TaxPub(DT) 1503 (Bom-HC) (FB), Glory Life Sciences (P) Ltd. v. Asstt. CIT [ITA No. 5128 to 5131/DEL/2017, dated 6-4-2021], Radhika Surgical (P) Ltd. v. Asstt. CIT [ITA No. 5090, 5091, 5092 / DEL/2017, dated 17-2-2021] : 2021 TaxPub(DT) 1301 (Del-Trib), Radhika Surgical (P) Ltd. v. Asstt. CIT [ITA No. 5088/DEL/2017, dated 21-1-2021] : 2021 TaxPub(DT) 511 (Del-Trib) and 2020 TaxPub(DT) 4381 (Del-Trib).

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : A.Ys. 2007-08 to 2012-13

IN THE ITAT, DELHI BENCH