Case Note & Summary
The present appeal was filed by the Principal Commissioner of Income Tax, Nagpur, against the order of the Income Tax Appellate Tribunal (ITAT) which had entertained an oral submission by the assessee regarding a defective show cause notice issued under Section 271(1)(c) of the Income Tax Act, 1961. The appeal was admitted on 10.01.2018 and heard on 28.02.2018. The question formulated was whether the ITAT was justified in entertaining a ground by oral submission without any specific ground raised before it and without any defence, submission, or pleadings by the assessee at the first instance before the assessing officer or the CIT(A). During the hearing, the assessee's counsel sought adjournment to verify the position after certain judgments, including CIT vs. Smt. Kaushalya & Ors. (1995) 216 ITR 660 (Bom.), CIT & Anr. vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Karnataka), and CIT vs. Shri Samson Perinchery (2017) 392 ITR 4 (Bom.). The court noted that the revenue most probably acquiesced in the ITAT's decision and dismissed the appeal, holding that the ITAT was justified in entertaining the oral submission as it pertained to a jurisdictional issue.
Headnote
A) Income Tax - Penalty Proceedings - Defective Show Cause Notice - Section 271(1)(c) of the Income Tax Act, 1961 - The ITAT can entertain a ground raised orally regarding the validity of a show cause notice for penalty, even if not specifically pleaded earlier, as it goes to the jurisdiction of the assessing officer. The court held that the ITAT was justified in considering the oral submission on the defective notice. (Paras 2-3) B) Income Tax - Appellate Tribunal - Powers - Oral Submissions - The ITAT has the power to consider a ground raised orally during hearing if it pertains to a jurisdictional issue, and the revenue's acquiescence in earlier proceedings does not preclude the assessee from raising it. (Paras 2-3)
Issue of Consideration
Whether the Income Tax Appellate Tribunal (ITAT) was justified in entertaining a ground by oral submission regarding defective show cause notice under Section 271(1)(c) of the Income Tax Act, 1961, without there being any specific ground raised before it and without any defence, submission and pleadings made by the assessee at the first instance before the assessing officer or before the CIT(A).
Final Decision
Appeal dismissed. ITAT justified in entertaining oral submission on defective notice.
Law Points
- ITAT can entertain a ground raised orally without specific pleading if it goes to jurisdiction
- Defective show cause notice under Section 271(1)(c) can be raised at any stage
- Acquiescence by revenue in earlier proceedings does not bar challenge
