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of <h1>Appeal allowed by ITAT Delhi, penalty quashed under section 271(1)(c) for AY 2009-10. Defective notice renders penalty invalid.</h1> <h3>M/s Ashoka Machine Tools Intl. Pvt. Ltd. Versus Income-tax Officer, Ward 3 (3), New Delhi</h3> M/s Ashoka Machine Tools Intl. Pvt. Ltd. Versus Income-tax Officer, Ward 3 (3), New Delhi - TMI Issues:- Appeal against order of penalty u/s. 271(1)(c) of the I.T. Act, 1961 for assessment year 2009-10.- Whether the notice issued u/s. 271(1)(c) specifying the charge is necessary for levying penalty.Analysis:Issue 1: Appeal against Penalty OrderThe appeal was filed against the penalty order u/s. 271(1)(c) of the I.T. Act, 1961 for the assessment year 2009-10. The appellant contended that the penalty amount was not justifiable as there was no concealment or furnishing of inaccurate particulars of income. The Hon'ble CIT(A) sustained the penalty, leading to the appeal before the ITAT Delhi.Issue 2: Necessity of Specific Charge in NoticeThe primary contention was regarding the legality of the notice issued u/s. 271(1)(c) which did not specify the specific charge for which penalty was imposed. The appellant argued that the notice lacked specificity, affecting the validity of the penalty proceedings. The ITAT Delhi referred to past judgments, emphasizing the importance of the notice specifying the exact charge to allow the assessee to defend appropriately. The Tribunal noted that the notice in question did not clearly indicate whether it was for concealment of income or furnishing inaccurate particulars, rendering it defective.Judicial Precedents and DecisionThe ITAT Delhi cited various judicial precedents, including the Karnataka High Court's decision in CIT vs. Manjunatha Cotton & Ginning Factory, emphasizing the necessity of the notice specifying the grounds for penalty. Additionally, the Delhi High Court's ruling in PCIT vs. Sahara India Life Insurance Company Ltd. was crucial in determining the validity of the penalty order. The ITAT relied on these precedents to conclude that the defective notice invalidated the assumption of jurisdiction by the Assessing Officer to levy the penalty. Consequently, the ITAT quashed the penalty order, following the established legal principles and precedents.ConclusionIn light of the legal precedents and the defective notice issued u/s. 271(1)(c), the ITAT Delhi allowed the appeal and deleted the penalty levied on the assessee. The judgment emphasized the importance of a specific charge in the notice for initiating penalty proceedings, ensuring procedural fairness and adherence to legal requirements.
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