TaxTMI 
TaxTMI 
2026 (7) TMI 1075
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..../s. 271(1)(c) of the Act for furnishing inaccurate particulars of income and concealing the income. 3. Thereafter, the Assessing Officer issued statutory notice dated 28.03.2016 u/s. 274 r.w.s 271 of the Act for the following limb/charges: • Has concealed the particulars of income "OR"....................... Furnishing inaccurate particulars of such income. And ultimately, vide penalty order dated 24.03.2025 u/s. 271(1)(c) of the Act, levied the penalty to the tune of Rs. 44,79,690/- @ 100% of the tax sought to be evaded on the income of Rs. 1,38,07,031/-. 4. Therefore, the Assessee, being aggrieved, challenged the said penalty levied, by filing First Appeal before the Ld. Commissioner, who, vide impugned order, affirmed the penalty by dismissing the First Appeal filed by the Assessee. 5. Thus, the Assessee, being aggrieved, has preferred instant appeal. 6. Heard the parties and perused the material available on record. The Assessee, at the outset, demonstrated the fact and issue by drawing attention of this Court to the notice dated 28.03.2016 u/s. 274 r.w.s 271 of the Act, and claimed that by issuing such notice the Assessing Officer has not made any s....
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....by the judgment of the Jurisdictional High Court in the case of Md. Farhan A Shaikh (supra) . 8. We further observe that the validity/legality of such kind of notice as involved in this case, has also been examined by the Hon'ble Coordinate Bench of the Tribunal recently in the case of Chiragkumar Rajendrabhai Shah Vs ITO, Ward 30(1)(2), [now] ITO Ward 41(3)(1) {ITA Nos.7130,7131 & 7132/M/2025 decided on 05.02.2026 and ultimately deleted the identical penalty levied, on the basis of similar kind of notice u/s. 274 r.w.s. 271(i)(c) of the Act, by observing and holding as under: "7. We have heard the parties and perused the material available on record. As observed above, the Assessing Officer, vide assessment order dated 30.03.2014, made an addition of Rs. 8,23,49,198/-, which was sustained by the then CIT(Appeals), vide order dated 09.04.2014 to the extent of 25%, i.e. Rs. 2,05,87,299/-. The Hon'ble Tribunal, by order dated 03.04.2018 in ITA Nos. 4086 to 4088/M/2016, subsequently restricted the said addition to 12.5% of the total disallowance made by the Assessing Officer. 8. As, the Assessee has raised a legal point/ground, which goes to the root of the ....
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....risdictional High Court in the case of Md. Farhan A Shaikh vs. DCIT (2021) 434 ITR 1 (Bom.) (HC) (FB) and various other judgments of the jurisdictional Benches of the Tribunal, including in the case of Korbusier Kinema Private Limited, Juhu vs. NFAC ACIT, Circle-15(1)(2), ITA No. 1016/M/2025, decided on 01.05.2025 wherein, the Hon'ble Coordinate Bench of the Tribunal not only considered the judgment of the Hon'ble Jurisdictional High Court in the case of Md. Farhan A Shaikh (supra), but also in the case of Veena Estate (P) Ltd. vs. CIT (2024) 461 ITR 483 (Bom.), which was delivered in favour of the Revenue, and held as under: 5. Thereafter, the AO issued a show cause notice dated 27.12.2008 for concealment of the particular of income or/and furnishing of inaccurate particulars of such income and ultimately vide penalty order dated 18.01.2022 u/s. 271(1)(c) of the Act imposed the penalty to the tune of Rs. 9.97.234/being 200% of the tax sought to be evaded on the income of Rs. 14.95.851/-. M/s. Korbusier Kinema Private Limited 6. The Assessee, being aggrieved, challenged the said levy of penalty before the Ld. Commissioner, however, of no avail, as the Ld.....
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....r the first time before the Hon'ble High Court by raising additional ground, which was not admitted and rejected by the Hon'ble High Court by interim order. Here it is not the case so, as in the instant case the Assessee has challenged the notice u/s. 274 r.w.s. 271 of the Act before the second appellate authority and within a reasonable time and therefore the judgment referred to by the Ld. D.R. is factually dissimilar. 12. Even otherwise, the Hon'ble Jurisdictional High Court in the Full Bench case in the case of Md. Farhan A Shaikh (supra) has elaborately dealt with the issue and the relevant judgments and therefore respectfully following the said judgment, we are inclined to delete the penalty imposed by the AO and affirmed by the Ld. Commissioner. Thus, the penalty is deleted. 13. We further observe that the Hon'ble Jurisdictional High Court, recently in the case of Principal Commissioner of Income Tax -6 vs. Colo Colour Private Limited (Income Tax Appeal No. 48 of 2022), decided on 16.09.2025, also dealt with an identical issue, qua not specifying the relevant limb/charge for initiating the penalty proceedings and held as under: 16. It i....
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.... Factory 359 ITR 565 (Kar), held as under: "21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnataka High Court in CIT v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and observed that the notice issued by the AO would be bad in law if it did not specify which limb of Section 271(1)(c) the penalty proceedings had been initiated under i.e. whether for concealment of particulars of income or for hesitation to delete the penalty levied by the AO and affirmed by the Ld. Commissioner. 17. Thus, on the aforesaid analyzations, we are unable to sustain the penalty levied under section 271(1)(c) of the Act. Hence, the same is deleted. 9. Thus, respectfully following the aforesaid judgment, we are inclined to delete the penalty under consideration, hence the same is deleted. 9. Thus, respectfully following the judgment referred to above, we are inclined to delete the penalty. Hence, the penalty is deleted by allowing appeal of the Assessee. 10. In the result, the Assessee's Appeal is allowed. Order pronounced in the open cour....