The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) quashed the levy of penalty under section 271(1)(c ) of the Income Tax Act,1961 on the grounds of absence of proper opportunity of hearing.
Global Cricket Corpn Pte Ltd, the respondent-assessee was a company incorporated in Singapore and had obtained Worldwide Media and sponsorship rights concerning various cricketing events from 2000 to 2007 and had earned income from granting broadcasting and sponsorship rights to various broadcasters and sponsors and the assessee had filed its return of income declaring total income at Rs.55,67,480/- and the same was processed under section 143(1) of the Income Tax Act,1961.
The revenue appealed against the order passed by the Commissioner of Income Tax (Appeals) for partly deleting the levy of penalty under section 271(1)(c) of the Income Tax Act of Rs.35,41,86,182/-.
P J Pardiwala, the counsel for the assessee contended that it was a settled proposition of law that the assessing officer ought to have struck off the irrelevant limb while issuing the penalty notice and the penalty levied by the assessing officer and partly confirmed by the Commissioner had to be deleted.
Ajay Kumar Sharma, the counsel for the department contended that the assessee had furnished the inaccurate particulars of income for the balance receipts where the assessee had not made full disclosure of the nature of the receipts along with the name of the parties, the amount and consideration received by the assessee.
The Bench observed that in the case of Mohd. Farhan A. Shaikh, the court held that the nonstriking on the irrelevant limb would vitiate the penalty proceedings in toto.
The two-member bench comprising Kavitha Rajagopal (Judicial) and Om Prakash Kant (Accountant) quashed the levy of penalty under section 271(1)( c) of the Income Tax Act.
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