HC quashed penalty notice as it didn’t specify whether penalty was imposed for concealment or furnishing of inaccurate info {Principal Commissioner of Income-tax vs. Quippo Telecom Infrastructure (P.) Ltd. [2025] 175 taxmann.com 503 (Delhi)}
Facts of the Case
- Assessee, Quippo Telecom Infrastructure (P.) Ltd., filed its income tax return for AY 2010–11.
- Assessing Officer disallowed certain professional expenses and interest claims, resulting in additions to the assessee’s income.
- AO issued a penalty notice under section 271(1)(c) but did not specify whether the penalty was for concealment of income or furnishing inaccurate particulars.
- Assessee challenged the penalty; while the quantum addition was upheld, the penalty was struck down by the Tribunal.
- The Revenue appealed this decision before the Delhi High Court.
Issue
Whether penalty proceedings under section 271(1)(c) are valid if the notice does not specify whether the charge is for concealment of income or furnishing inaccurate particulars
Held
- The High Court held the penalty notice invalid as it failed to specify the correct charge under section 271(1)(c).
- It reaffirmed that such defective notices are not sustainable in law, relying on prior decisions.
- The Court also noted that the issue was debatable and the assessee had disclosed all facts, so no penalty could be imposed even on merits.
- The appeal by the Revenue was dismissed.
