The Income Tax Appellate Tribunal (ITAT), Delhi bench, held that the notice for penalty proceedings was issued by the Assessing Officer without specifying the charge of the offense committed by the assessee. Therefore, the bench deleted the penalty.
The assessee, Mideast Integrated Steels Ltd., is engaged in the business of manufacturing pig iron and mining iron ore. The assessee filed a return of income for Assessment Year 2014-15, declaring a total income of Rs. 52,60,76,020 under the normal provisions of the Income Tax Act and a book profit of Rs. 184,99,20,449 under Section 115JB of the Income Tax Act.
Upon completion of the assessment proceedings, penalty proceedings under Section 271(1)(c) of the Act were initiated by the AO through the issuance of a notice under Section 274 r.w. Section 271(1)(c) of the Income Tax Act.
In the said show-cause notice, the AO did not specify the specific charge of the offense committed by the assessee, i.e., whether the assessee had concealed the particulars of income or furnished inaccurate particulars of income.
Aggrieved by the order, the assessee filed an appeal before the CIT(A), who dismissed the appeal. Thus, the assessee filed a second appeal before the tribunal.
The Tribunal, while considering the appeal, relied upon the decision of the Bombay High Court in the case of Mohd. Farhan A. Shaikh vs. ACIT and concluded that the notice issued by the AO without specifying the charge of the offense committed by the assessee is not valid.
After reviewing the facts and records, the two-member bench of M. Balaganesh (Accountant Member) and Anubhav Sharma (Judicial Member) allowed the appeal filed by the assessee.
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