Penalties under sections 271(1)(c) and 270A deleted due to defective notices and immunity provisions

ITAT Delhi ruled in favor of the assessee on two penalty matters. For penalty u/s 271(1)(c), the AO failed to strike off irrelevant portions in the notice u/s 274, not specifying whether the assessee concealed income or furnished inaccurate particulars. Following Mohd. Farhan A Shaikh precedent, the defective notice was fatal to proceedings. For penalty u/s 270A, the show cause notice was vague as it failed to mention specific sub-clause under section 270A(9) for misreporting. The case qualified for immunity under section 270A(6)(b) as disallowances were made on estimated basis. Both penalties were deleted.

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Issues involved:
The judgment involves issues related to the levy of penalties under sections 271(1)(c) and 270A of the Income-tax Act, 1961.

For ITA No. 1849/Del/2024 - AY 2015-16:
The main issue was whether the penalty u/s 271(1)(c) was justified. The appeal was allowed as the penalty notice did not specify the offence committed by the assessee, following the precedent set by the Bombay High Court.

For ITA No. 1850/Del/2024 - AY 2017-18:
The key issue was the confirmation of penalty u/s 270A. The penalty was canceled as the notice was vague and did not specify the sub-clause under which the penalty was initiated, in line with the decisions of the Jurisdictional High Court.

In the first case, the penalty u/s 271(1)(c) was canceled as the penalty notice did not specify the offence committed by the assessee, following the precedent set by the Bombay High Court. The AO was directed to delete the penalty as the notice did not strike off the irrelevant portion regarding the offence committed by the assessee.

In the second case, the penalty u/s 270A was canceled as the notice was vague and did not specify the sub-clause under which the penalty was initiated. The assessee had provided complete details during the assessment proceedings, entitling them to relief based on technical grounds. The cancellation of penalty was in line with the decisions of the Jurisdictional High Court.

Both appeals were allowed, and the penalties were canceled in light of the technical deficiencies in the penalty notices. The judgments were pronounced on 12/06/2024.

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