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Judgment
PER MADHUMITA ROY, JM:
The instant appeal filed by the assessee is directed against the order dated 13.11.2025 of the ld. Commissioner of Income-tax (Appeals), NFAC, Delhi [hereinafter referred to as the Ld. CIT(A)] u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) arising out of the penalty order dated 21.03.2024 passed by the National Faceless Assessment Centre (hereinafter referred to as ‘the ld. AO’) under Section 271(1)(c) of the Act for Assessment Year 2016-17.
The assessee has come up in appeal against the impugned order under Section 271(1)(c) of the Act which was initiated separately as claimed to have been done by the Ld. AO for concealment of its income as it appears from the assessment order dated 22.05.2023 under Section 147 r.w.s 144B of the Act. The Ld. AO finalized the penalty by passing orders as follows:-
| 1. | Total amount of addition on which penalty u/s 271(1)(c) is leviable | Rs.26,59,125/- |
| 2. | Tax on addition with surcharge | Rs.16,43,340/- |
| 3. | Minimum penalty u/s 271(1)(c) @ 100% of tax sought to be evaded | Rs.16,43,340/- |
| 4. | Maximum Penalty u/s 271(1)(c) @ 300% of tax sought to be evaded | Rs.49,30,018/- |
| 5. | Penalty levied to be livable | Rs.16,43,340/- |
The Ld. CIT(A) dismissed the appeal preferred by the assessee as barred by limitation since the assessee failed to justify the delay of 219 days by specifying any sufficient cause; the explanation so offered by the assessee is found to be general, non-specific and unsupported by evidence as per the observations of the Ld.CIT(A).
At the time of hearing, the Ld. Counsel submitted before us that the show cause notice for penalty under Section 271(1)(c) of the Act dated 10.01.2024 for the year under consideration though issued, no notice has been issued alleging either concealment of income or furnishing inaccurate particulars of income made by the assessee which is mandatory failing which the entire proceedings is vitiated and, thus, liable to be quashed as was the argument advanced by the Ld. Counsel for the assessee before us which is found to be acceptable. Further, no such submission made by the ld. AR was controverted by the Ld. DR keeping in view the settled position of law. Thus, having regard to this particular aspect of the matter that the penalty was levied against the assessee without issuing mandatory notice under Section 271(1)(c) of the Act is found to be bad in law, void ab initio and, therefore, quashed.
In the result, the appeal filed by the assessee is allowed.