S.S. COMMOSALE PVT. LTD.,KOLKATA vs. D.C.I.T., CENTRAL CIRCLE - 3(3), , KOLKATA

IN THE INCOME TAX APPELLATE TRIBUNAL “B” BENCH, KOLKATA Before Shri Rajesh Kumar, Accountant Member and Shri Pradip Kumar Choubey, Judicial Member ITA No. 1412 & 1413 /KOL/2024 Assessment Year: 2013-14 & 2014-15 S.S. CommosalePvt. Ltd.......................................................................................Appellant 307A, Kamalalaya Center, 156A, Lenin Sarani, Dharmatolla, Kolkata- 700013 [PAN No. AAOCS3291E] Vs. D.C.I.T., Central Circle- 3(3)………………....…….................................….Respondent Aayakar Bhawan Poorva, 110, Shanti Pally, Kolkata- 700107 Appearances by: Miraj D. Shah, A.R. appeared on behalf of the Appellant. Monalisa Pal Mukherjee, JCIT, Sr. DR ,appeared on behalf of the Respondent. Date of concluding the hearing : July 01 , 2026 Date of pronouncing the order : July 21 ,2026 ORDER Per Pradip Kumar Choubey, Judicial Member: This appeal filed by the assessee is directed against the order dated 21.06.2024 of the National Faceless Appeal Centre (NFAC), passed under Section 271(1)(c) of the Assessment Year 2013-14 & 2014-15 of the Income-tax Act, 1961 (hereinafter referred to as “the Act”). 2. Since the issues are common hence both the appeals are taken up together for disposal by taking ITA No. 1412/2024 being a lead case. 3. The brief facts of the case of the assessee isthat the assessee being a company filed original return of income for the Assessment year 2013-14 on 27.09.2013declaring total income of Rs.3.15,740/ The case was selected for scrutiny vide CASS and notice under section

ITA No.1412 & 1413/Kol/2024 143(2) was issued on 08.09.2014 and the appellant complied with the same on 16.10.2014. Thereafter, a search and seizure operation u/s 132 of the IT Act, 1961, was conducted on 17.12.2014 and 18.12.2014 at various premises of Adhunik Group of cases and the appellant company was covered under a search warrant. During such operation incriminating documents vide Identification Marks AIPL/1 to AIPL/6, AIPL/PO/1, AS/1 SJPPL/1 to SJPPL/3 were found and seized. From the documents it was observed that the appellant had received share capital of Rs.1,36,90,000/- from different parties/companies with huge share premium by making cash payment to these parties. The share capital was received through banking channel but before that similar amount of cash was paid by the appellant to those parties/companies. On confrontation, the appellant could not submit any explanation and accepted that the amount of Rs.1,36,90,000/- was appellant's undisclosed income in cash and disclosed the same u/s 132(4). Consequently, a notice u/s 153A of Act. was issued for the A.Y. 2013-14 on 23.09.2015 and in response to the said notice, the appellant filed return of income on 06.11.2015 disclosing a total income of Rs.1.40.05,740/-reflecting the amount of Rs. 1.36.90,000/- as Income disclosed in other income under thehead "other sources". The assessment was completed at a total income of Rs. 1,40,05,740/- on 27.12.2016 and proceedings under section 271(1)(c) was initiated by issuance of Notice under section 274 read with section 271 of the Act. During the penalty proceedings the appellant submitted that the directors of the assessee company to buy peace and avoid prolonged litigations made a disclosure of Rs. 1,36,90,000/- in respect of share capital raised by the assessee company during the year under consideration. However, the Ld. AO had observed that it was only due to the search and seizure operation which led to the seizure of the incriminating documents due to which the assessee had to disclose the

ITA No.1412 & 1413/Kol/2024 amounts of Rs.1,36,90,000/- as its undisclosed income and therefore imposed a penalty of Rs.44,44,350/- being 100% of the tax sought to be evaded. Aggrieved by the said order, assessee preferred appeal before the CIT(A) wherein appeal of the assessee has been dismissed. Being aggrieved by and dissatisfied, the assessee preferred appeal before us. 3. The Ld. AR challenges the very impugned order there by submitting that the order passed u/s 271(1)(c) was bad in law as Assessing Officer has stated that the assessee has furnished inaccurate particulars and in the subsequent line, he failed to specify the other particular conditions for which penalty proceedings are initiated. The Ld. AR submits that notices u/s 274 read with section 271(1)(c) has stated that you have concealed income and furnished inaccurate particulars of income that makes the penalty proceeding void ab initio as there is no specific limb has been mentioned for which penalty proceedings are initiated.He has cited following decisions- (i) Commissioner of Income Tax Vs ManjuNatha Cotton and Ginning Factory reported in 2013(359) ITR 563. (ii) PCIT KOL V/s Dr. Murari Mohan Koley I.T.A.T No. 306/2017. (iii) M/s. Yachio Engineering Co. Ltd. Vs. Adit (International Tax) – II, The Ld. AR further submits that Assessing Officers erred in law as well as in facts in imposing penalty being 100% of tax sought to be evaded ignoring the facts that during course of such operations, certain documents were seized which are alleged at the time to be incriminating in nature and the assessee found it proper to make disclosure of the same to buy peace and avoid prolonged litigation. The

ITA No.1412 & 1413/Kol/2024 Ld. AR submits that the disclosure was made to avoid litigation and to buy pace and immunity from imposition of the penalty. The Ld. AR further submits that in fact there was no concealment of the income and further submitted that group company Adhunik Infrastructures Pvt. Ltd had filed a disclosure petition before the investigation wing wherein it has categorically be stated that cash in question was generated from cash rebates, discounts and other receipts from various parties. Thus, by the assessee’s own contemporaneous disclosure, the said income has been owned and explained by Adhunik Infrastructures Pvt. Ltd. The Ld. AR has filed the copy of the notice issued u/s 274 of the Act. Contrary to that the learned DR supports the impugned order. 4. Upon hearing the submission of the counsel of the respective parties an on perusal of the impugned order, we find that a search was conducted on the assessee and its group companies on 17.12.2014 and based on disclosure petition filed in the said search and the return of income filed in response to the search assessment proceedings, the Ld. Assessing Officers accepted the return income, however in imposed penalty u/s 271(1)(c) of the Act in the following manners:- (A) Rs. 44,44,350/- for the Assessment Year 2013-14 and (B) Rs. 73,93,613/- for the assessment year 2014-15. It is important to mention here that the assessee has challenged the validity of the issuance of the notice u/s 274 read with Section 271 of the Act, the notice is as below: - NOTICE UNDER SECTION 274 READ WITH SECTION 271 OF THE INCOME TAX ACT 1961 PAN/GIR-AAOC532918

ITA No.1412 & 1413/Kol/2024 Office of the Assistant Commissioner of Income Tax. Central Circle-3(3)/Kolkata, 10, Shanti Pally, Aayakar Bhawan Poorva Kolkata-700107. Date: 27.12.2016 To M/S SS COMMOSALE PRIVATE LIMITED To 307A, KAMALALAYA CENTRE, 156A, LENIN SARANI, KOLKATA-700013

Sir/Madam, Sir/Madam,

Whereas in the course of proceeding before me for the A.Y. 2013-14 it appears to me

that you

Have without-reasonable-cause-failed-to-furnish me return of income- which-you-wore-required-to furnich-by-a-notice-given-under-section- 22111/22(21/34 of the Indian Income-tax Act, 1922-of which-you-were- require-to-furnish-under-section 139(1) or by a notice-given-under-section 139(2)/148-of-the-income-Tae-Act, 1961, No. without-reasonable-cause failed to furnish within the time allowed-and-the-manner-required-by the-said-section-139(1) or by such-notice. Have without reasonable cause failed to-comply with a notice under- section-22(4)/23(2) of the Indian-Income-tax Act, 1922-or-under-section 142(11/143(3) of the Income-Tax Act, 1963

ITA No.1412 & 1413/Kol/2024 No dated Have concealed-of-your-income and furnished inaccurate particulars of income as per the details stated in the assessment order enclosed where the reason for addition of income concealed by you and/or furnished in- accurate particulars of income has been elaborately stated which satisfied the undersigned that it is a fit case for initiation of penalty proceedings u/s 271(1)(c). There are several points, some of which attract concealment and some attract the provision of furnishing of in- accurate particulars of income. You are hereby requested to appear before me at 12:00 P.M. on 07.02.2017 and show cause why an order Imposing a penalty on you would not be made section 271 of the Income-tax Act, 1961. If you do not wish to avail yourself of this opportunity of being heard in person or through authorized representative you may show cause in writing on or before the said date which will be considered before any such order is made under section 271(1)(c).

Seal: (Susanta Saho)/ (सुशांत साहा) Assistant Commissioner of Income Tax/ आयकर सह-आयु�त Central Circle 3(3)/क���य वृ� 3(3), Kolkata / कोलकाता सुशा�त साठा SUSANTA SAHA As Con

4.1. From the aforesaid notice, it is clear that initially the Assessing Officers haswritten that the assessee has furnished inaccurate particulars as per the details but in the subsequent lines, he mentioned that where the reason for addition of Income concealed by you/or furnished inaccurate particulars of income. The Ld. Assessing officers failed to specify the specific limb for which penalty proceedings are 6

ITA No.1412 & 1413/Kol/2024 initiated. It was duty of the Ld. Assessing Officers to mention that as to violation of which limb and condition the penalty proceedings are being initiated but no such thing has been done by the Ld. Assessing Officers in the present case. In this context, I have gone through the order passed by the Kolkata High Court Manjunatha Cotton & Ginning Factories confirmed by the Apex Court in which Hon’ble Karnataka High Court has held thus:- “though penalty proceedings are in the nature of civil liability, in fact, it is penal in nature. In either event, the person who is accused of the conditions mentioned in section 271should be made known about the grounds on which they intend imposing penalty on him assection 274 makes it clear that the assessee has a right to contest such proceedings and should have full opportunity to meet the case of the Department and show that the conditions stipulated in section 271(1)(c) do not exist as such he is not liable to pay penalty. The practice of the Department sending a printed form where all the grounds mentioned in section 271 are mentioned would not satisfy the requirement of law when the consequences of the assessee not rebutting the initial presumption is serious in nature and he had to pay penalty from 100 per cent. to 300 per cent. of the tax liability. As the said provisions have to be held to be strictly construed, notice issued under section 274 should satisfy the grounds which he has to meet specifically Otherwise, the principles of natural justice is offended if the show-cause notice is vague. On the basis of such proceedings, no penalty could be imposed on the assessee." 4.3. It is pertinent to mention here that following the decision of the Karnataka High Court confirmed by the Apex Court, several order has been passed by the Income Tax Tribunal by giving relief to the assessee on the ground that Assessing Officer has failed to mention the penalty notice that for violation of which limb to the notice penalty

ITA No.1412 & 1413/Kol/2024 has been initiated. It is pertinent to mention here that the present case of the assessee is not the case of furnishing of in-accurate particulars of income as a disclosure made by the assessee to buy peace and to avoid litigation. 5. Keeping in view the facts is stated above and on perusal of the notice u/s 274 read with section 271 of the IT Act, we find substance in the submission of the AR is that notice issued u/s 274 read with Section 271 of the IT Act,is bad in law as it did not specify in which limb of Section 271(1(c) of the Act, the penalty proceeding had been initiated whether for concealment of particulars of income or furnishing of inaccurate particulars of income. Accordingly, we quash the notices issued u/s 274 read with Section 271 of the IT Act. Since, we have quashed that notices issued. Hence, all subsequent proceedings are hereby set aside. We allow the appeal of the assessee on this issue.Since the issue and submissions are the same in other appeal, hence the order passed shall apply as Mutatis Mutandis in ITA No. 1413.2024. In the result both the appeal of the assessee is allowed.

Kolkata, the 21st July , 2026.

Sd/- Sd/-

[Rajesh Kumar] [Pradip Kumar Choubey] Accountant Member Judicial Member

DC Dated:. 21 .07.2026.

ITA No.1412 & 1413/Kol/2024

Copy of the order forwarded to: 1. Appellant - 2. Respondent - 3. CIT(A)- 4. CIT- 5. CIT(DR)

//True copy// By order Assistant Registrar, Kolkata Benches

ITA No.1412 & 1413/Kol/2024