Ansal Properties & Infrastructure Limited vs ACIT, Central Circle-2, New Delhi

PER MADHUMITA ROYA, JM:

The instant appeal filed by the assessee is directed against the order dated 24.10.2025 passed by the Ld. Commissioner of Income-tax (Appeals)-24, New Delhi [hereinafter referred to as the Ld. CIT(A)] under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the penalty order dated 01.04.2022 passed by the Assessing Officer, National Faceless Assessment Centre, Delhi (hereinafter referred to as ‘the Ld. AO’) under Section 271(1)(c) of the Act for Assessment Year 2015-16 whereby and whereunder the penalty imposed against the assessee under Section 271(1)(c) of the Act amounting to Rs.2.65 crore has been upheld.

At the time of hearing of the instant appeal, the Ld. Counsel appearing for the assessee submitted before us that the notice under Section 271(1)(c) of the Act issued under the signature of the ACIT, Circle-2(2), New Delhi, appearing at page 638 of the paper book filed before us is without jurisdiction and nonest in the eyes of law in view of the fact that the charges of both the limbs under Section 271(1)(c) of the Act being concealment of income and furnishing of inaccurate particulars of income have been alleged against the assesee. As the notice does not specify as to whether the case was of concealment of income or furnishing of inaccurate particulars of income, the same is bad in law as has been held in very many judgements passed by different judicial forums as also submitted by him. In this matter, he has relied upon the judgement passed by the Hon’ble Supreme Court in the case of CIT & Anr. Vs. M/s SSA’s Emerald Meadows reported in 2016 (8) TMI 1145 wherein the notice issued by the AO under Section 271(1)(c) has been held to be bad in law as it did not specify the limb of Section 271(1)(c) of the Act as to whether the penalty proceedings was initiated for concealment of income or for furnishing of inaccurate particulars of income and the issue has been decided in favour of the assessee quashing the penalty proceedings initiated under Section 271(1)(c) of the Act. Such submissions made by the Ld. Counsel appearing for the assessee has not been controverted by the Ld. DR.

Having regard to the settled principle of law that in the absence of any specified violation of the limb under Section 271(1)(c) of the Act either for concealment of income or for furnishing of inaccurate particulars of income, the initiation of penalty proceedings is bad in law and void ab initio. We taking into consideration the identical facts and circumstances of the matter and relying upon the judgement of the Hon’ble Supreme Court as above, quash the impugned penalty order.

In the result, the appeal filed by the assessee is allowed.