IN THE INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH ‘C’, NEW DELHI

Before Sh. BHAVNESH SAINI, Judicial Member
Dr. B. R. R. Kumar, Accountant Member

(Through Video Conferencing)

ITA No. 6193/Del/2015 : Asstt. Year : 2008-09

M/s Havells India Limited. Vs Deputy Commissioner of
I, Raj Narain Marg, Income Tax (L.T.U.),
Civil Lines, Delhi-110054 New Delhi

(APPELLANT) (RESPONDENT)
PAN No.

Assessee by : Sh. Rohit Jain, Adv.
Revenue by : Sh. Prakash Dubey, Sr. DR

Date of Hearing: 18.01.2021 Date of Pronouncement: 10.02.2021

ORDER

Per Dr. B. R. R. Kumar, Accountant Member:

The present appeal has been filed by the assessee against
the order of the ld. CIT(A)-LTU, New Delhi dated 03.07.2012.

2. Following grounds have been raised by the assessee:

“1. That the impugned order of ld. CIT (A), LTU, New
Delhi is bad in law and wrong on the facts and in the
circumstances of the case and legal position.

2. That on the facts and in the circumstances of the
case and the legal position, the ld. CIT (Appeals) has
erred in confirming the penalty levied u/s 271(1)(c)
in respect of addition on account of exchange loss
amounting to Rs.3,99,821/- related to capital cost on
import of machinery.”
2 ITA No. 6193/Del/2015

Havells India Ltd.

3. The Assessing Officer levied penalty of Rs.3,99,000/- in respect of

addition on account of exchange related to capital cost on import of

machinery.

4. At the outset, the ld. AR referred to page no. 59 of the paper book
showing the penalty notice issued u/s 274 r.w.s. 271 and submitted that
the penalty levied is not sustainable in view of the defect in the notice of
penalty which is as under:
3 ITA No. 6193/Del/2015

Havells India Ltd.

5. We have gone through the record before us. We have gone through

the facts of the case and find that the Assessing Officer has not made it

clear under which limb of the provisions of Section 271(1)(c) of the Act,

the penalty is being levied. There is glaring discrepancy between initiation

of the penalty and levy of penalty. This is a jurisdictional issue arising out

of the penalty order before us.

6. The Ld. Departmental Representative heavily relied on the judgment
of Sundaram Finance Ltd. Vs CIT (2018) 403 ITR 407 (Madras) and
argued that the Hon’ble High Court held that where notice did not show
the nature of default, it was a question of fact. The assessee has
understood purport and import of the notice, hence, no prejudice was
caused to the assessee.

7. The judgment of the Hon’ble Jurisdictional High Court in the case of

Sahara India Life Insurance Company Ltd. in ITA No. 426/2019 dated

02.08.2019 wherein the Hon’ble High Court 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 Karnataka High Court in CIT
v. Manjunatha Cotton & Ginning Factory 359 ITR 565 (Kar) and
observed that the notice issued by the AO would be bad in law if it did
not specify which limb of Section 271(1)(c) the penalty proceedings
had been initiated under i.e. whether for concealment of particulars of
income or for furnishing of inaccurate particulars of income. The
Karnataka High Court had followed the above judgment in the
subsequent order in Commissioner of Income Tax v. SSA’s Emerald
Meadows (2016) 73 Taxman.com 241 (Kar), the appeal against which
was dismissed by the Supreme Court of India in SLP No. 11485 of
2016 by order dated 5th August, 2016.

22. On this issue again this Court is unable to find any error having
been committed by the ITAT. No substantial question of law arises.”

8. Similar view has been taken by the Hon’ble Supreme Court in the

case of SSA’s Emerald Meadows (CC No.11485/2016).
4 ITA No. 6193/Del/2015

Havells India Ltd.

9. Hence, respectfully following the judgment of the Hon’ble

Jurisdictional High Court and Hon’ble Apex Court, we hereby hold that the

penalty levied by the Assessing Officer cannot be held to be legally valid in

the eyes of law.

10. In the result, the appeal of the assessee is allowed.
Order Pronounced in the Open Court on 10/02/2021.

Sd/- Sd/-

(Bhavnesh Saini) (Dr. B. R. R. Kumar)
JUDICIAL MEMBER ACCOUNTANT MEMBER

Dated: 10/02/2021 ASSISTANT REGISTRAR

*Subodh*
Copy forwarded to:
1. Appellant
2. Respondent
3. CIT
4. CIT(Appeals)
5. DR: ITAT