ITAT Delhi Quashes Section 270A and Section 271AAB Penalties Over Ambiguous Show Cause Notices
Overview of the Case
The Income Tax Appellate Tribunal, Delhi Bench, recently dealt with three connected appeals filed by the same assessee against orders passed by the Commissioner of Income Tax (Appeals) upholding penalties levied under Section 270A and Section 271AAB of the Income-tax Act, 1961. These appeals related to Assessment Years 2017-18, 2018-19, and 2019-20. Given that all three matters involved the same assessee and raised overlapping legal questions, the Tribunal chose to hear and decide them together through a single consolidated order.
Facts Leading to the Dispute
The assessee is a partnership concern engaged in trading and distributing mobile handsets and accessories, particularly Karbonn and Panasonic branded devices. On 29.08.2018, the premises of this firm were covered under a search and seizure action initiated under Section 132 of the Act, forming part of a broader search operation targeting the Jain Group. Following this search, assessments for the three years in question were finalized under Sections 153A/143(3), resulting in multiple additions to the declared income. Based on these additions, the Assessing Officer subsequently initiated penalty proceedings under Section 270A (for AY 2017-18) and Section 271AAB (for AY 2018-19 and AY 2019-20). The CIT(A) upheld all three penalty orders, prompting the assessee to approach the Tribunal.