India's ITAT invalidates improper income‑tax penalty and Section 148 notices

The Income Tax Appellate Tribunal (ITAT) in Hyderabad ruled that show‑cause notices issued under Section 274 in conjunction with Section 271AAB were defective because they did not specify the applicable clause or charge. As a result, penalties of ₹1.89 crore and ₹1.62 crore imposed for Assessment Year 2017‑18 were deleted, with the tribunal holding the penalty proceedings unsustainable.

Separately, the ITAT’s Raipur bench found that an Assistant Commissioner of Income Tax (ACIT) lacked jurisdiction to issue a notice under Section 148 for a non‑corporate assessee whose income was below ₹15 lakh, contrary to CBDT Instruction No. 1/2011. The notice to Preethi Engineering Enterprises, which reported ₹1,38,829 for Assessment Year 2014‑15, was declared void ab initio and the reassessment order was quashed.