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2025 Supreme(Online)(Del) 5381

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Anish Dayal, JJ
PR. COMMISSIONER OF INCOME TAX – Appellant
Versus
M/S. CORTEVA AGRISCIENCE PVT. LTD. – Respondent
ITA 344/2025 | ITA 345/2025 | ITA 349/2025 | ITA 350/2025

Advocates:
For the Appellants/Petitioners: Mr. Indruj Singh Rai, SSC, Mr. Sanjeev Menon, JSC, Mr. Rahul Singh, JSC, Mr. Gaurav Kumar, Mr. Tanishq Ahuja
For the Respondents:Mr. Ajay Vohra, Senior Advocate, Mr. Aditya Vohra, Mr. Shashwat Dhamija

The validity of penalty proceedings under the Income Tax Act requires specific notice regarding the grounds for imposing penalties, emphasizing clarity and legal precision in taxation enforcement.

Headnote:(A) Income Tax Act, 1961 - Section 271(1)(c) - Penalty proceedings - The Income Tax Appellate Tribunal upheld the respondent's appeal against the penalty imposed for furnishing inaccurate particulars, citing invalidity of notice issued by Assessing Officer. The Tribunal relied on previous judgments emphasizing the necessity for the notice to specify whether the penalty was for concealment of income or for inaccurate particulars. (Paras 7, 16-20)

(B) Jurisdiction - Courts are not to interfere when no substantial question of law arises. The appeals were disposed of in favor of the respondent upholding the ITAT’s decision. (Paras 20-21)

Facts of the case:
The appeals concern penalties for Assessment Years where the respondent was penalized under Section 271(1)(c) for alleged concealment or inaccuracies in income reporting. Notice issued by the Assessing Officer lacked clarity on the grounds for penalty.

Findings of Court:
The notice was deemed invalid due to vagueness, hence no substantial legal question arose in these appeals.

Issues: The core issue was the validity of the penalty notice concerning specific allegations under Section 271(1)(c).

Ratio Decidendi: The need for precision in penalty proceedings is critical; vague notices render penalties invalid, reinforcing appellate courts' restraint when lower court decisions are legally sound.

Result: Appeals disposed of in favor of the respondent.

Table of Content
1. issues of penalty notice validity under section 271(1)(c). (Para 7)

HON'BLE MR. JUSTICE V. KAMESWAR RAO HON’BLE MR. JUSTICE ANISH DAYAL V. KAMESWAR RAO, J. (ORAL CM APPL. 53007/2025 of ITA 344/2025 CM APPL. 53010/2025 of ITA 345/2025 CM APPL. 53038/2025 of ITA 349/2025 CM APPL. 53047/2025 of ITA 350/2025 Signature Not Verified Signed By:PRADEEP ITA 344 /2025, ITA 345/2025, ITA 349/2025 & ITA 350/2025 Page 1 of 6

1. Exemptions allowed, subject to all just exceptions.

2. The applications are disposed of.

CM APPL. 53005/2025(condonation of delay of 13 days in filing the appeal) CM APPL. 53006/2025( condonation of delay of 654 days in refilling the appeal) of ITA 344/2025 CM APPL. 53008/2025(condonation of delay of 13 days in filing the appeal), CM APPL. 53009/2025( condonation of delay of 654 days in refilling the appeal) of ITA 345/2025 CM APPL. 53036/2025(condonation of delay of 13 days in filing the appeal), CM APPL. 53037/2025( condonation of delay of 654 days in refilling the appeal) of ITA 349/2025 CM APPL. 53045/2025(condonation of delay of 13 days in filing the appeal), CM APPL. 53046/2025( condonation of delay of 654 days in refilling the appeal) of ITA 350/2025

3. For the reasons stated in the applications, the delay in filing and re-

filing the captioned appeals stands condoned.

4. The applications stand disposed of.

ITA 344/2025 ITA 345/2025 ITA 349/2025 ITA 350/2025

5 . As these four appeals involve identical issue relatable to the same assessee/respondent for the Assessment Years („AY’) 2002-03, 2003-04, 2005-06, 2010-11; they are being decided by this common order.

6. For the sake of reference, we shall deal with the facts as noted from the appeal relating to AY 2002-03.

7. The issue which arises for consideration is primarily whether the Income Tax Appellate Tribunal („ ITA T‟) is justified in allowing the appeal filed by the respondent/assessee challenging the penalty imposed under Signature Not Verified Signed By:PRADEEP ITA 344 /2025, ITA 345/2025, ITA 349/2025 & ITA 350/2025 Page 2 of 6 Section 271 (1)(c) of the Income Tax Act, 1961 („the Act‟).

8. Suffice it to state that the ITAT has relied upon the judgment of this Court in the case of Principal Commissioner of Income Tax v. Sahara India Life Insurance Co. Ltd. Neutral Citation:2019:DHC:7413-DB decided on 02.08.2019, while deciding the appeal filed by the respondent/assessee.

9. The facts as noted are that the respondent, known as M/s PHI Seeds Private Limited, is engaged in the business of agriculture activities i.e.

multiplication, production and sale of seed crop etc.

10. On 31.10.2002, the assessee filed its return declaring a total income of Rs.38,53,720/- for AY 2002-03. On 22.03.2005, the return of the assessee was processed under Section 143 (3) of the Act and the Assessing Officer („AO‟) passed an Assessment Order assessing the income at Rs.3,27,75,246/-. Penalty Proceedings under Section 271 (1)(c) of the Act were initiated separately.

11. The assessee challenged the Assessment Order before the Commissioner of Income Tax (Appeals) [„CIT(A)‟], who dismissed the said appeal and upheld the Assessment Order.

12. Aggrieved by the order of the CIT(A), assessee filed an appeal before the ITA T being ITA No. 1988/DEL/2006. ITA T vide order dated 18.12.2017, dismissed the appeal and upheld the Assessment Order.

13. Thereafter, on 08.12.2018, a Show Cause Notice under Section 271 (1)(c) of the Act was issued to the respondent/assessee, calling upon it to explain why a penalty under Section 271 (1)(c) of the Act may not be imposed, as in the Assessment Proceedings it appeared that the assessee had concealed the particulars of income and furnished inaccurate particulars of Signature Not Verified Signed By:PRADEEP ITA 344 /2025, ITA 345/2025, ITA 349/2025 & ITA 350/2025 Page 3 of 6 such income.

14. On 31.07.2008, the AO passed the Penalty Order under Section 271 (1)(c) of the Act,, whereby a penalty of Rs. 2,49,97,905/

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2025 Supreme(Online)(Del) 5381

IN THE HIGH COURT OF DELHI AT NEW DELHIV. Kameswar Rao, Anish Dayal, JJPR. COMMISSIONER OF INCOME TAX – AppellantVersusM/S. CORTEVA AGRISCIENCE PVT. LTD. – RespondentITA 344/2025 | ITA 345/2025 | ITA 349/2025 | ITA 350/2025

The validity of penalty proceedings under the Income Tax Act requires specific notice regarding the grounds for imposing penalties, emphasizing clarity and legal precision in taxation enforcement.

Cases Referred (2)

IN THE HIGH COURT OF DELHI AT NEW DELHI
V. Kameswar Rao, Anish Dayal, JJ
PR. COMMISSIONER OF INCOME TAX – Appellant
Versus
M/S. CORTEVA AGRISCIENCE PVT. LTD. – Respondent
ITA 344/2025 | ITA 345/2025 | ITA 349/2025 | ITA 350/2025