TaxTMI 
TaxTMI 
2026 (1) TMI 923
X X X X Extracts X X X X
X X X X Extracts X X X X
....e Act") for the assessment year 2014-15, wherein learned CIT(A)has dismissed assessee first appeal, confirming the penalty levied by the Assessing Officer u/s. 271(1)(c) of the Act, vide penalty order dated 16.03.2019. 2. Brief facts of the case are that the assessee is engaged in wholesale trading of handloom textile material and e-filed his return of income on 17.09.2014, declaring an income of Rs. 5,32,240/-. The assessment in the case of assessee was completed on 24.11.2016 u/s. 143(3) of the Act, assessing total income of assessee at Rs. 1,03,53,019/- as against declared income of Rs. 5,32,240/-, by making disallowance of Rs. 39,779/- towards share purchase expenses, adhoc disallowance of various other expenses amounting to Rs. 50,0....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t the Special Leave Petition filed by the Revenue against the decision in SSA Emerald Meadows (supra) was dismissed by the Hon'ble Supreme Court (2016) 73 taxmann.com 248 (SC), thereby affirming the legal position. However, the learned CIT(Appeals) dismissed the assessee's first appeal by placing reliance on the decision of the Hon'ble Karnataka High Court in CIT v. Sri Durga Enterprises and the judgment of the Hon'ble Bombay High Court in Maharaj Garage & Co. v. CIT (2017). 4. Aggrieved, the assessee has preferred this second appeal on the following grounds : "1. BECAUSE, Penalty order as had been passed by the 'AO' and as sustained by the 'CIT(A)' is void ab-initio in view of the fact that the Notice dated 24.1....
X X X X Extracts X X X X
X X X X Extracts X X X X
....t of deeming fiction cannot be a valid foundation for levy of penalty under section 271(1)(c) of the 'Act, as such addition is purely notional and involves no element of concealment or furnishing of inaccurate particulars. 7. BECAUSE, the Ld. CIT(A) erred in sustaining penalty in respect of enhancement of Rs. 26,00,000/- made by the CIT(A) in the quantum appeal, whereas penalty on such enhanced income could only be initiated and imposed by the Assessing Officer. 8. BECAUSE, the learned CIT(A) erred in not appreciating that the alleged cash credits were duly explained, supported by PAN, confirmations and ledger accounts, and hence there was neither concealment nor furnishing of inaccurate particulars on the part of the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1(1)(c) of the Act. In support, he has relied upon following decisions of various High Courts and ITAT : (i). M/s. Toshiba Water Solutions (P) Ltd. vs. ACIT 2025(9) TMI 511(ITAT Delhi - order dated 29.08.2025) (ii). M/s. Vijay Power Generators Ltd. vs. ITO, 2025(4) TMI 604 (ITAT Delhi - order dated 09.04.2025). (iii). PCIT vs. M/s. Gragerious Projects Pvt., (2025) 475 ITR 546 (Del) ( order dated 22.11.2024. (iv). PCIT vs. M/s. Modi Rubbers Ltd. (2024) 462 ITR 319 (Del) (order dated 06.10.2023); (v). PCIT vs. Jehangir H.C. Jehangir, 2023 (9) TMI 499 (Bombay High Court - order dated 06.09.2023). (vi). PCIT vs. Gopal Kumar Goyal (2024) 462 ITR 313(Del) (order dated 06.07.2023); (vi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....merald Meadows (supra), and the Hon'ble Karnataka High Court in CIT v. Manjunatha Cotton and Ginning Factory (supra), have categorically held that failure to specify the particular charge in the notice issued under section 274 vitiates the entire penalty proceedings. Various other judicial precedents relied upon by the learned Authorized Representative, including the decision dated 11.03.2021 rendered by full bench of Bombay High Court in the case of Mr. Mohd. Farhan A. Shaikh (supra), which has been followed in various recent decisions, as noted above, further reinforce the settled legal position that no penalty under section 271(1)(c) can be sustained when the foundational notice itself is invalid or defective. The decision relied upon by....