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TMI Blog2024 (10) TMI 1080X X X X Extracts X X X X X X X X Extracts X X X X ..... om the penalty order passed under section 271(1)(c) of the Act, for the assessment year 2007-08. 2. In its appeal, the assessee has raised the following grounds: - "1. Fair Opportunity of being heard is not given: On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble Commissioner of Income Tax Appeals erred in upholding the action of the Learned Assessing Officer of giving sufficient opportunity of being heard without considering the Appellant's submission that the notices issued were never received by the Appellant as the Assessing Officer issued notices manually on old address instead of issuing them on the updated address ch with the records of income tax department. The Appellant submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1(1)(c) be treated as bad in law and therefore, be quashed. 3. Penalty of Rs. 29 02 020/- is levied u/s 271(1)(c) on the addition of Rs. 86 21 564/- made u/s 69C: On the facts and in the circumstances of the case, the Appellant submits that the Hon'ble Commissioner of Income Tax Appeals erred in upholding the action of the Assessing Officer of levying the penalty of Rs. 29,02,020/- u/s 271(1)(c) by treating the adhoc addition of Rs. 86,21,564/- on the basis of peak balance as concealed income by relying heavily on the assessment proceedings and without considering the submissions alongwith the recent judgements relied upon by the Appellant. The Appellant submits that the penalty of Rs. 29,02,020/- levied u/s 271(1)(c) be deleted. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of Rs. 86,21,564 under section 69C of the Act by considering the assessee's claim of purchases from the bogus entities as non-genuine. 5. Subsequently, the penalty order dated 14/05/2018 was passed by the AO under section 271(1)(c) of the Act, wherein a penalty of Rs. 29,02,020, was levied. In the further appeal against the penalty order, the learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee and upheld the levy of penalty under section 271(1)(c) of the Act. Being aggrieved, the assessee is in appeal before us. 6. During the hearing, the learned Authorised Representative ("learned AR"), inter-alia, submitted that the penalty in the present case has been levied without specifying the head under which the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Larger Bench of the Hon'ble Jurisdictional High Court in Mohd. Farhan A. Shaikh (supra) held that the defect in notice by not striking off the irrelevant matter would vitiate the penalty proceedings. During the hearing, the learned DR placed reliance upon the decision of the Hon'ble Jurisdictional High Court in Veena Estate (P) Ltd. (supra), wherein it was held that an alleged defect in notice issued to assessee under section 274 r/w section 271(1)(c) of the Act, in regard to which assessee had never raised an objection from very inception could not be permitted to raise in appeal before High Court in absence of any prejudice being caused. It is the plea of the assessee that the issue as regards the defect in the notice has been rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ecision of the Hon'ble Jurisdictional High Court in Veena Estate (P) Ltd. (supra) does not support the plea of the learned DR in the present case, as the same has been rendered in a completely different factual matrix, where after 30 years the taxpayer sought to raise ground as regards the defect in notice issued under section 274 r/w section 271(1)(c) of the Act before the Hon'ble High Court for the first time. Therefore, the reliance placed by the learned DR on the decision of the Hon'ble Jurisdictional High Court in Veena Estate (P) Ltd. (supra) is completely misplaced in the facts of the present case. 10. The learned DR has also relied upon the decision of the coordinate bench of the Tribunal in Moola Padmaja v/s ACIT, in ITA No. 234/H ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n A. Shaikh (supra) squarely covers this issue. Accordingly, respectfully following the aforesaid decision of the Hon'ble Jurisdictional High Court in Mohd. Farhan A. Shaikh (supra), the penalty notice issued under section 274 r/w 271(1)(c) of the Act is held to be invalid, and the penalty order passed under section 271(1)(c) of the Act for the assessment year 2007-08 is hereby quashed. As a result, ground No. 2 raised in assessee's appeal is allowed.
12. Since the relief has been granted to the assessee on this short issue, the other grounds raised by the assessee have become academic and therefore are left open.
13. In the result, the appeal by the assessee is allowed.
Order pronounced in the open Court on 26/08/2024 X X X X Extracts X X X X X X X X Extracts X X X X
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