IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “F”: NEW DELHI BEFORE SHRI ANUBHAV SHARMA, JUDICIAL MEMBER AND SHRI AMITABH SHUKLA, ACCOUNTANT MEMBER ITA No. 7885/DEL/2019 Assessment year: 2015-16 Dial net Communications Ltd., Vs Income Tax Officer, C-31, Ground Floor, Greater Ward-7(3), New Delhi.

Kailash, Part-I, Delhi-110048.

PAN: AABCD 5472 D APPELLANT RESPONDENT Assessee represented by Shri Harsh Gollmudi, Adv.

Department represented by Ms. Harpreet Kaur Hansra, Sr.

DR Date of hearing 24.07.2025 Date of pronouncement 19.09.2025

O R D E R

PER AMITABH SHUKLA, A.M:

This appeal, preferred by the assessee for assessment year

2015-16, is directed against the order of Commissioner of Income-Tax (Appeals)-3, New Delhi dated 02.08.2019 in appeal No. 3/10017/18-19 against the order dated 27.04.2018 passed by the ITO, Ward-7(3), New Delhi u/s 271(1)(c) of the Income-tax Act (hereinafter referred to as the “Act”). The reference to the word “Act” in this order hereinafter shall mean the Income Tax Act, 1961 as amended from time to time.

2.0 The only issue contested in the present appeal through its grounds of appeal are regarding the imposition of penalty of Rs.8,27,940/- by the Ld.AO u/s 271(1)(c ) of the Act dated 27/4/2018 and its confirmation by the Ld.CIT(A) vide order dated 02/08/2019. The short point raised before us through is that the penalty notice u/s 271(1) (c ) dated 20/09/2017 issued by the Ld.AO was defective in as much as it did not specifically clarify as to whether the penalty was being proposed to be imposed for concealment of income or for furnishing of inaccurate particulars. The Ld.Counsel for the assessee argued that it is settled principle of law that the Ld.AO in its notice must vividly indicate as to whether the penalty was being proposed to be imposed for concealment of income or for furnishing of inaccurate particulars. It was argued that in the absence thereof the penalty notice per se would become infructuous and invalid and that therefore no consequent penalty order can be rested upon the same. The Ld.Counsel for the assessee placed reliance upon a plethora of judicial pronouncements, inter-alia, including of Hon’ble Apex Court in the case of Reliance Petro Products 322 ITR 158. It was accordingly requested that as the penalty order was infructuous and invalid, the penalty order imposing penalty in its case of Rs.10 lakhs may be set aside.

3.0 Per contra, the Ld.DR relied upon the order of lower authorities.

4.0 We have heard the rival submissions in the light of material available on records. The issue of legality of a penalty notice u/s 271(1) (c ) has been a matter of great debate in the judicial forums. Thus, it is now a settled principle of law that the Revenue authorities are required to clearly specify in their penalty notice, if issued u/s 271(1)(c), as to whether they wish to initiate penalty for the concealment of income OR for furnishing of inaccurate particulars thereof. It is settled that penalty would not survive if such classification is not borne on the face of the notice itself. Thus, in the case of Mahavir Chand Jain in ITA No.905 to 912 through its order dated

13.05.2022 the Chennai tribunal has observed as under:-

“…..7. Before us, Ld. AR raised a pertinent legal issue and submitted that specific charge i.e., furnishing of inaccurate particulars of income or concealment of income, has not been framed against the assessee in the show-cause notice as well as in penalty order. Therefore, considering the ratio of various binding judicial precedents, the penalty stood vitiated for want of framing of specific charge. The copies of these decisions have been placed on record which include the decision of Hon’ble Madras High Court in Babuji Jacob vs ITO (430 ITR 259) as well as the decision of Hon’ble Bombay High Court in PCIT V/s Goa Coastal Resorts and Recreation (P.) Ltd (272 Taxman 157) against which revenue’s Special Leave petition (SLP) has already been dismissed by Hon’ble Supreme Court which i