IN THE INCOME-TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE SHRI RAHUL CHAUDHARY, JUDICIAL MEMBER &

SHRI PRABHASH SHANKAR, ACCOUNTANT MEMBER ITA No.5790/MUM/2025 (A.Y. 2010-11)

Everest Kanto Cylinder v/s. Deputy Commissioner of Ltd. बनाम Income Tax, Circle – 3(4), 204,Raheja Centre, Free World Trade Centre 1, Cuffe Press Journal Marg, Parade, Mumbai – 400005, Nariman Point, Mumbai – Maharashtra

400 021, Maharashtra स्थायी लेखा सं./जीआइआर सं./PAN/GIR No: AAACE0836F Appellant/अपीलार्थी .. Respondent/प्रतिवादी

Appellant by : Shri Shekhar Gupta,AR Respondent by : Shri Hemanshu Joshi, (Sr.DR)

Date of Hearing 12.11.2025 Date of Pronouncement 10.12.2025 आदेश / O R D E R PER PRABHASH SHANKAR [A.M.] :-

The present appeal arising from the appellate order dated

04.09.2025 is filed by the assessee against the order passed by the Learned Commissioner of Income-tax, Appeal, CIT(A)-56, Mumbai [hereinafter referred to as “CIT(A)”] pertaining to the penalty order passed u/s. 271(1)(c) of the Income-tax Act, 1961 [hereinafter referred to as “Act”] dated 31.07.2017 for the Assessment Year [A.Y.] 2010-11.

2. In the only ground of appeal, it is stated that the ld.CIT(A)

erred in law and on the facts of the case in holding that the notice u/s. 271(1)(c) was valid although the said notice did not indicate whether there is concealment of income or furnishing inaccurate particulars of income.

3. Briefly stated facts of the case are that the assessee filed return declaring income of Rs 18.36 cr. under normal provisions and Rs 33.52 cr. u/s 115JB of the Act which was revised subsequently and the assessment was made u/s 143(3)/144C(13) of the Act by making certain additions. In the subsequent quantum appeal, the ITAT allowed the appeal partly upholding the additions/disallowances of Rs 33.50 lakh and Rs 1.15 cr in respect of Shortfall interest from subsidiaries and Guarantee Commission respectively. The AO passed penalty order u/s 271(1)© of the Act amounting to Rs 60 lakh in respect of additions upheld.

4. Aggrieved, in the appeal filed before the ld.CIT(A), the assessee challenged the penalty order on merits as also on legal ground that the AO in the show cause notice issued u/s 274 of the Act, did not specify the exact charge of penalty u/s 271(1)(c) of the Act as none of the two limbs of concealment or filing of inaccurate particulars of income were striked off. The ld.CIT(A) cancelled the penalty on merits. However, on the legal ground, he affirmed the conclusion drawn by the AO inter alia relying on the jurisdictional High Court decision in the case of Kaushalya 216 ITR 660 wherein the hon’ble Court held that mere mistake in the language used or mere non-striking off of inaccurate portion could not by itself invalidate the notice.

5. Before us, the ld.AR has submitted that the AO has failed to categorically charge the assessee since both the limbs have remained unchanged as one of them needed to be struck off which has not been done. He placed on record copy of the show cause notice u/s 274 of the Act. He placed reliance on various judicial decisions in support of the grounds of appeal in this regard i.e. Times Global Broadcasting Ltd(2025) 172 taxmann.com 786(Bom) and Unitech Reliable Projects P.Ltd(2024) 166 taxmann.com 135(SC).The ld.DR has placed reliance on the orders of the authorities below.

6. We have gone through the above penalty notice and find that the AO issued notice u/s 271(1)(c)/274 of the Act, stating that: “you have concealed the particulars of your income by furnishing inaccurate particulars of income.". These are both limbs of the notice, that is, "concealment of income" and for "furnishing inaccurate particulars of income". Therefore, it is abundantly clear that the AO has initiated penalty on both the limbs. He did not strike off the irrelevant portion and has not shown whether he has initiated penalty on concealment of income or on furnishing inaccurate particulars of income. In such a situation, the assessee was not aware about the