DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, MUZAFFARPUR, MUZAFFARPUR vs. ANAND JEWELLERS AND CO., CHOWK BAZAR, PURANI BAZAZI

ITA 541/PAT/2025Status: DisposedITAT Patna24 September 2026AY 2023-246 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the order of the CIT(A) and dismissed the appeals filed by the revenue. The Tribunal found no error in the CIT(A)'s order, which cancelled the penalty on the ground that the notice issued under Section 274 read with Section 271AAB of the Act did not disclose the relevant particulars required to be mentioned. The Tribunal noted that the notice dated 08.01.2025 clearly lacked these essential details. In reaching this decision, the Tribunal followed the judicial discipline by relying on the precedents set by the Hon'ble Madhya Pradesh High Court in PCIT vs. Kulwant Singh Bhatia and the Hon'ble Calcutta High Court in PCIT vs. Industrial Safety Products Pvt. Ltd. As the CIT(A)'s order was upheld, the cross-objections filed by the assessee, which supported the CIT(A)'s order, were also dismissed. No issue was expressly left undecided.

What were the facts?

The revenue, DCIT, Central Circle, Muzaffarpur, filed three appeals (ITA Nos. 541, 542, and 543/PAT/2025) and the assessees (Anand Jewellers And Co., Anand Kumar, and Bindu Devi) filed cross-objections (CO Nos. 13, 15, and 14/PAT/2026) against the orders of the CIT(A)-3, Patna, dated 28.08.2025. The assessment year in all cases is 2023-24. The appeals and cross-objections arise from the CIT(A)'s decision to quash penalties levied under Section 271AAB of the Income Tax Act, 1961.

What were the issues?

1. Whether the penalty levied under Section 271AAB of the Income Tax Act, 1961, is valid when the notice issued under Section 274 read with Section 271AAB does not specifically mention the limb under which the penalty has been levied? Assessee's Contention: The assessee argued that the CIT(A) correctly cancelled the penalty, relying on the decisions of the Hon'ble Madhya Pradesh High Court in PCIT vs. Kulwant Singh Bhatia and the Hon'ble Calcutta High Court in PCIT vs. Industrial Safety Products Pvt. Ltd. These decisions held that a penalty notice must specify the particulars required, and if it fails to do so, the penalty is liable to be cancelled. Revenue's Contention: The revenue submitted that the CIT(A) quashed the penalty on a technical ground, specifically a defect in the notice under Section 274 r.w.s. 271AAB. The revenue prayed that the penalty should not be cancelled on a technicality and argued that the CIT(A) had not decided the matter on merits.

Which sections of the Income-tax Act were involved?

Section 274,Section 271AAB

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Heard together (5 matters)

ITA Nos.541/PAT/2025
CO Nos.13/PAT/2026
ITA Nos.542/PAT/2025
CO Nos.15/PAT/2026
ITA No.543/PAT/2025

Read from the judgment's own cause title. This page is filed under one of them.

IN THE INCOME TAX APPELLATE TRIBUNAL PATNA BENCH PATNA (THROUGH HYBRID HEARING AT KOLKATA) BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER AND SHRI LAXMI PRASAD SAHU, ACCOUNTANT MEMBER आयकर अपील सं/ITA Nos.541/PAT/2025 (निर्धारणवर्ा / Assessment Year: 2023-24)

Siwan-841226, Siwan, Bihar. PAN No. : ABWFA3246M (अपीलधर्थी/Appellant) .. (प्रत्यर्थी / Respondent) CO Nos.13/PAT/2026 (in ITA Nos.541/PAT/2025) (निर्धारणवर्ा / Assessment Year: 2023-24)

Siwan-841226, Siwan, Bihar. PAN No. : ABWFA3246M (अपीलधर्थी/Appellant) .. (प्रत्यर्थी / Respondent) आयकर अपील सं/ITA Nos.542/PAT/2025 (निर्धारणवर्ा / Assessment Year: 2023-24)

Purani Bazazi, Siwan-841226, Bihar PAN No. : AINPK2945H (अपीलधर्थी/Appellant) .. (प्रत्यर्थी / Respondent) CO Nos.15/PAT/2026 (in ITA Nos.542/PAT/2025) (निर्धारणवर्ा / Assessment Year: 2023-24)

Purani Bazazi, Siwan-841226, Bihar PAN No. : AINPK2945H (अपीलधर्थी/Appellant) (प्रत्यर्थी / Respondent) .. आयकर अपील सं/ITA No.543/PAT/2025 (निर्धारणवर्ा / Asses

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