IN THE INCOME-TAX APPELLATE TRIBUNAL “D” BENCH, MUMBAI BEFORE SHRI SANDEEP GOSAIN, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.4304/MUM/2025 (A.Y. 2012-13)

M. Lakhamsi & Co. v/s. Deputy Commissioner of 505, Churchgate Income Tax, Circle– 17(1), बनाम Chambers, 5, New Marine Kautilya Bhavan, Bandra Kurla Lines, Mumbai – 400 020, Complex, Bandra (East), Maharashtra Mumbai –400051, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AABFM5192L ..

Appellant/ Respondent/

अपीलार्थी प्रतिवादी

Appellant by : Mr. Ketan Vajani, CA Respondent by : Shri Annavaran Kasuri, (Sr. AR)

Date of Hearing 09.09.2025 Date of Pronouncement 13.10.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The present appeal is preferred by the assessee against the order passedby the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] pertaining to a penalty order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 30.03.2018 for the Assessment Year [A.Y.] 2012-13.

2. The grounds of appeal are as under:

1. On the facts and in the circumstances of the case, the assessing officer has erred in levying penalty u/s. 271(1)(c) in pursuance of an invalid show-cause notice u/s. 271(1)(c), without specifying the charge under which the penalty is levied. The Commissioner of Income-tax (Appeal)- NFAC, has erred in confirming the penalty levied in pursuance of such invalid show-cause notice without any discussion on the specific ground raised in relation to the same. The appellant prays that the order imposing penalty may please be quashed.

2. The CIT(A) has erred in confirming the penalty of Rs. 47,74,794/- by passing the order without considering the specific request to keep the appeal pending since the quantum appeal was pending before the CIT (A). The CIT (A) has erred in not providing opportunity of hearing before passing the order despite of the specific request for the same.

3. Without prejudice to Ground - 1 and Ground 2 above, the assessing officer has erred in levying penalty u/s. 271(1)(c) in respect of the addition of Rs. 1,72,92,564/- on account of alleged undervaluation of stock. The CIT(A) has erred in confirming the penalty on this issue without any discussion and opportunity to present the case on merits.

4. The appellant respectfully submits that levy of penalty u/s. 271(1)(c) of the Act in respect of the above addition is not justified on legal principles. The appellant, therefore, prays that the penalty on this addition may please be deleted

3. In ground no.1, the assessee has taken a legal plea that the ld.AO did not strike off either of the limbs in the show cause notice issued u/s 274 of the Act before imposing penalty u/s 271(1)© of the Act. The AO levied penalty Rs. 47,74,794/- in respect of the disallowance of Rs. 38,30,978/-on account of Foreign Exchange Loss and in respect of the addition of Rs. 1,72,92,564/- on account of alleged undervaluation of stock.It is noticed that penalty was levied on account of certain disallowances made in the assessment order which were upheld by the appellate authorities.

4. Before us, the ld. DR has contended that the issue of striking off of one of the limbs in the show cause notice was never raised before the lower authorities. He further placed reliance on the decision of co- ordinate bench of ITAT,Mumbai wherein it held in the case of Earth moving Equipment Service Corporation vide its order reported in (2017) 166 ITD 113 (Mumbai)/(2017) 187 TTJ 233 (Mumbai Tribunal) that mere non-ticking of the relevant clause in notice would not invalidate the penalty proceedings.The ld.DR submitted that from the quantum order it is seen that the AO clearly initiated the penalty proceedings, after due deliberation, for furnishing of inaccurate particulars which shows due application of mind qua penalty proceedings. Section 292B of the Act comes to the rescue of the revenue in such a case as in substance and ef