SATYAKRITI SAREES PVT. LTD. ,KOLKATA vs. DCIT,CIR-12(2), KOLKATA. , KOLKATA

The captioned appeal has been filed by the assessee is directed against the order of the National Faceless Appeal Centre (hereinafter ‘the ld. CIT(A)’) passed u/s 250 of the Income Tax Act, 1961 (hereinafter ‘the Act’), dt. 14/06/2023, for Assessment Year 2014-15.

The sole grievance of the assessee is against the levy of penalty at Rs. 27,688/- levied u/s 271(1)(c) of the Act. From the grounds it has been contended that the showcause notice issued u/s 274/271 of the Act is bad in law as the specific charge is not levelled against the assessee as to whether the assessee has been met for concealing the particulars of income or furnishing inaccurate particulars of income. Reliance was placed on the order of Co-ordinate Bench of ITAT Kolkata in the case of Surjit Kaur Uberoi vs. ACIT in Assessment Year 2013-14, order dt. 16/03/2023. I.T.A. No. 732/Kol/2023 Assessment Year: 2014-15 Satyakriti Sarees Pvt. Ltd. 2 On the other hand, the ld. D/R supported the orders of the lower authorities.

We notice that the assessee is a private limited company. Assessment u/s 143(3) of the Act for Assessment Year 2014-15 was completed on 30/12/2016 and the addition included amount of Rs.89,603/- made for furnishing of inaccurate particulars of income. The penalty proceedings u/s 271 of the Act were initiated and showcause notice u/s 274 r.w.s. 271(1)(c) of the Act issued on 30/12/2016 and the said notice is reproduced below:-

From perusal of the above notice, we find that the ld. Assessing Officer has not struck off one of the charge not applicable to the Assessment Year: 2014-15 Satyakriti Sarees Pvt. Ltd. 3 assessee and in absence of levelling specific charged for levying penalty u/s 271(1)(c) of the Act which has been consistently held by the Hon’ble Courts that such notice is illegal and bad in law and, therefore, the proceedings carried out thereafter, becomes illegal.

Recently, this Tribunal in the case of Surjit Kumar Uberoi (supra) dealing with the similar issue, has decided the issue in favour of the assessee observing as follows:- “5. We have duly considered the rival contentions and gone through the copy of the show-cause notice available on page no. 1 of the paper book. It is very debatable issue across the country, whether penalty could be imposed upon an assessee in the absence of any specific charge in the show-cause notice issued under section 274 read with section 271(1)(c) of the Income Tax Act. In other words, the ld. Assessing Officer is required to specify the charge on which an assessee has to give explanation, namely whether penalty is to be imposed upon the assessee for concealment of income or for furnishing of inaccurate particulars. In the judgments cited before us, this question has been answered in favour of the assessee, i.e. in case, the charge is not specified in the show-cause notice, then penalty would not be imposable upon the assessee.”