Defect in Notice that Creates Jurisdiction is an Incurable Defect: ITAT Quashes Wealth Tax Proceedings against Sahara [Read Order]

The Delhi bench of Income Tax Appellate Tribunal has quashed Wealth Tax proceedings against the Sahara India Commercial Corporation Ltd.

In the instant case the assessee company, Sahara India Commercial Corporation Ltd has filed the return of wealth declared the net wealth of Rs. 15,59,03,165/- after that it was found that the assessee has omitted to add some taxable assets of one of its partnership firms and also filed a revised computation of wealth which was declared the net wealth of Rs. 36,90,03,980/-.

However the Assessing Officer has levied penalty under section 18 (1) (c) of the Act and also issued notice according to the said section for concealment of income by the assessee. He failed to notice that the assessee has already filed the revised computation of wealth which included the omitted portion of income in the earlier wealth return computation.

The Delhi bench of ITAT consists of Judicial member K.N.Chary and president G.D.Agarwal has observed that it is clear that the penalty proceedings were initiated by the AO for furnishing inaccurate particulars of wealth and also the penalty order states that the penalty was imposed for furnishing inaccurate particulars. but the material facts reflected that the assessee filed a revised computation which is included the omitted portion of income, but the AO failed to consider that revised computation.

And the bench also observed that the case of the assessee squarely falls within the ambit of Section 15 of the Act, as such it does not give rise to any penalty proceedings. Only on that view the AO has directed to delete the penalty charged by him. Hence the bench has allowed the appeal filed by the assessee by declaring that defect in notice that creates jurisdiction is an incurable defect.