IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH ‘F’, NEW DELHI BEFORE SHRI SATBEER SINGH GODARA, JUDICIAL MEMBER And SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER Assessment Years: 2014-15 Ram Garhia Cooperative Bank Vs Assistant Commissioner of Ltd. Income Tax, Central Circle-63(1), 1/4 , Desh Bandhu Gupta Road, New Delhi Pahar Ganj, Delhi-110055 (APPELLANT) (RESPONDENT)

PAN No.AAAJR0315H Assessee by Shri Bhupender Jeet Kumar, Adv. &

Shri Tushar, Adv. & Ms. Megha, Adv.

Revenue by Ms. Harpreet Kaur Hansra, Sr. DR Date of Hearing 16.02.2026 Date of Pronouncement 16.02.2026

ORDER

PER NAVEEN CHANDRA [A. M]:

The above captioned appeal is preferred by the assessee against the order dated 21.11.2019, passed by Learned Commissioner of Income Tax(Appeals)-33, New Delhi (hereinafter referred to as ‘ld. CIT(A)), under section 250 of the Income Tax Act, 1961 [hereinafter referred to as, “Act”] for Assessment Year 2014-15. The penalty order in this appeal is passed by the Assessing Officer [for short, AO] under section 274 r.w.s. 271(1)(c) of the Act.

2. The appeal pertains to penalty levied on the assessee under section 271(1)(c), the penalty proceedings were initiated on account of non-deduction of tax at source on the payment interest made on the nonmembers on charge of concealment of particulars of income.

3. At the outset, the ld. counsel for the assessee stated that penalty notice incorporated in page-85 of the paper book is defective as there is no specific ground given to the assessee as to whether the penalty is being levied for concealment of income or furnishing of inaccurate particulars of income and therefore the penalty proceedings are vitiated and the penalty order may be quashed.

4. Per Contra, learned Departmental Representative pointed out that penalty notice issued for Assessment Year 2014-15 dated 14.02.2019 which is available at page 8 of the paper book, clearly made the assessee aware that penalty under section 271(1)(c) is being initiated for concealment of particulars of income and therefore the proceedings are not vitiated.

5. We have heard the rival submissions and perused the material available on record. The Assessing Officer passed the assessment order under section 143(3) of the Act on 30.12.2016 and on the same dated 30.12.2016, issued a notice under section 271 r.w.s 274 seeking explanation from the assessee without specifying whether penalty is being initiated for concealment of income of furnishing of inaccurate particulars of income. We further found that Assessing Officer issued another notice dated 13.06.2017 for Assessment Year 2014-15 again without specifying whether penalty is being initiated for concealment of income of furnishing of inaccurate particulars of income. Thereafter, the Assessing Officer issued another notice under section 271(1)(c) of the Act on 14.02.2019, wherein the Assessing Officer specified that penalty is being initiated for concealment of particulars of income. We are of the considered view, in such factual matrix, that first and the initial notice under section 271(1)(c) dated 13.12.2016 was required to specify under which limb of the provision of section 271(1)(c) he has initiated the proceedings, whether the penalty is being initiated for concealment of income or furnishing of inaccurate particulars of income. This is a legal requirement as the penal proceedings is separate from assessment proceedings, and therefore it is incumbent upon the Assessing Officer to demonstrate under which limb he is proposing to levy of penalty while initiating penalty proceedings u/s 271(1(c) of the Act.

6. On identical circumstances, the Hon'ble High Court of Delhi in the case of Sahara India Life Insurance Company Ltd ITA No. 475 of 2019 order dated 02.08.2019 has in the context of penalty provisions u/s

271(1)(c), held as under:

“

21. The Respondent had challenged the upholding of the penalty imposed under Section 271(1)(c) of the Act, which was accepted by the ITAT. It followed the decision of the Karnatak