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Judgment
PER C.N. PRASAD, J.M.
This appeal is filed by the assessee against order of Ld. CIT(A)/NFAC dated 14.08.2025 for the A.Y. 2011-12 in sustaining the penalty levied u/s.271(1)(c) of the Act.
Ld. Counsel for the assessee at the outset referring to ground no. 3 of grounds of appeal of the assessee submitted that the penalty has been initiated vide notice u/s.271(1)(c) r.w.s 274 of the Act without any specific charge and hence the said notice and the penalty order passed u/s. 271(1)(c) of the Act are illegal and bad in law.
Reliance was placed on the decision of the Hon’ble Delhi High Court in the case of PCIT Vs. Chetan Gupta in ITA No.741/Del/2025 order dated 15.12.2025. Reliance was also placed on the decision of Hon’ble Delhi High Court in the case of PCIT Vs. M/s. Blackrock Securities Pvt. Ltd. in ITA No. 658/2023 dated 24.11.2023 and the decision in the case of PCIT Vs. Gopal Kumar Goyal ( 462 ITR 313) (Delhi).
Heard rival submissions and perused the orders of the authorities below. On perusal of the penalty notice issued u/s.271(1)(c) of the Act r.w.s. 274 of the Act dated 18.03.2024 which is placed at page 70 of the paper book, we find that the notice was issued stating that the assessee has concealed the particular of income or furnishing inaccurate particular of such income, without specifying to which limb the notice has been issued. Identical issue came up for consideration before the Hon’ble jurisdictional High Court in the above referred cases and the Hon’ble Delhi High Court in a recent judgment of PCIT Vs. Chetan Gupta held as under :-
6.On the last date of hearing, Mr Bhatia sought time to place before this Court the copy of notice which was issued to the respondent/Assessee on 28.12.2011 under Section 271 (1) (c) of the Act. Today, he has produced the copy of notice dated 28.12.2011 and same reads as under:-
"NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT, 1961 U/S 271AAA/271(1)(C)
Asstt. Commissioner of Income Tax Central Circle-2, New Delhi
PAN AATPG9580E
dated 28.12.2011
To,
Shri Chetan Gupta, 113, Answal Bhawan, Kasturba Gandhi Bldg New Delhi-110001
Whereas in the course of proceedings before me for the assessment year 2004-05 and it appears to me that you:-
*have without reasonable cause failed to comply with a notice under Section 142(1) /143(3) of the Income Tax Act, 1961 dated...
*have concealed the particulars of your income or furnished inaccurate particulars of such income in terms of explanation 1,2,3,4 and 6/Undisclosed income in the case of search.
You are hereby requested to appear before me at 4.30AM/PM on ... and show cause why an order imposing a penalty on you should not be made under Section 271 of the Income Tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorised representative, you may show cause in writing on or before the said date which will be considered before any such order is made under Section 271.
Assessing Officer
Asstt. Commissioner of Income Tax
Respectfully following the said decision we hold that the notice issued u/s.271(1)(c) of the Act is bad in law and consequently the penalty order passed u/s.271(1)(c) of the Act is bad in law and void ab-initio and the same is hereby quashed. Ground No.3 of grounds of appeal is allowed.
In the result, the appeal of the assessee is allowed.