UJJAL SINHA,KOLKATA vs. DCIT, CENTRAL CIRCLE 4(1),, KOLKATA

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ITA 1931/KOL/2025Status: DisposedITAT Kolkata13 November 2025AY 2008-20096 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the notice issued under Section 274 read with Section 271 of the Act dated 31.03.2014 was invalid. The Tribunal found that the Assessing Officer had not struck off the irrelevant limb or specified the limb under which the penalty was proposed to be levied, stating both limbs in the notice. This mechanical issuance of a standard format notice without application of mind prevented the assessee from replying to the correct charge. The Tribunal respectfully followed the decision of the Hon'ble Jurisdictional High Court in KPC Medical College and Hospital vs. PCIT reported in [2025] 173 taxmann.com 581 (Calcutta), which in turn relied on the decision in CIT v. Manjunatha Cotton & Ginning Factory (supra) and the Supreme Court's affirmation in CIT v. SSA'S Emerald Meadows [2016] 73 taxmann.com 248 (SC). The Tribunal concluded that the notice was bad in law, and consequently, the penalty proceedings were vitiated. Therefore, the assessment framed and the penalty imposed were quashed. The appeals for all assessment years were allowed.

What were the facts?

The assessee, Ujjal Sinha, filed appeals against orders of the National Faceless Appeal Centre (NFAC) dated 05.08.2025 and 04.08.2025, which confirmed penalties levied under Section 271(1)(c) of the Income Tax Act, 1961, by the Assessing Officer. The appeals pertain to Assessment Years 2008-09, 2009-10, and 2012-13. For AY 2008-09, a search operation on 24.01.2012 yielded no incriminating material. The assessee's original return was treated as a response to a notice under Section 153A. The assessment was completed under Section 153A/143(3) on 31.03.2014, assessing total income at Rs.12,70,550/- after disallowing a deduction of Rs.1,50,000/- claimed under Section 24(b). Based on this disallowance, a penalty notice under Section 271(1)(c) was issued, leading to a penalty order on 31.03.2023 imposing Rs.50,985/-. The CIT(A) dismissed the assessee's appeal.

What were the issues?

1. Whether the notice issued under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961, is vague and void ab initio due to not specifying the exact charge for penalty imposition, thereby warranting quashing of penalty proceedings. Assessee's Contention: The learned counsel for the assessee argued that the notice issued under Section 274 read with Section 271(1)(c) is vague as it does not mention any specific charge, making it null and void from the beginning. Consequently, the entire proceedings and the imposed penalty should be quashed and deleted. Reliance was placed on the decision in Commissioner of Income-tax v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250 (Karnataka), which held that a penalty under Section 271(1)(c) is invalid if the show cause notice under Section 274 does not specify whether the charge is for concealment of particulars of income or furnishing of inaccurate particulars of income. Revenue's Contention: The learned DR supported the impugned order, submitting that the assessee did not participate in the proceedings and had withdrawn the appeal against the assessment order.

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 250,Section 139(1),Section 153A,Section 143(2),Section 142(1),Section 24(b),Section 274,Section 271AAB,Section 162

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “D” BENCH KOLKATA

Before: Shri Rajesh Kumar & Shri Pradip Kumar Choubey

order

: November 13, 2025 ORDER

Per Pradip Kumar Choubey, Judicial Member:

1.

The captioned appeals have been preferred by the assessee against the separate orders dated 05.08.25, 05.08.25, 04.08.25 & 04.08.25 of the National Faceless Appeal Centre [hereinafter referred to as the “ld. CIT(A)”] passed u/s 250 of the Income Tax Act, 1961 [hereinafter referred to as the “Act”] confirming penalty u/s 271(1)(c) of the Act levied by the Assessing Officer. Since the issues involved in all the appeals are common and relate to the same assessee, therefore, these appeals have been heard together and are being disposed of by this consolidated order. is taken as lead case for narration of facts.

, 1932, 1934 & 1935/Kol/2025 Ujjal Sinha 2.

- Facts in brief are that the assessee had filed his return of income u/s. 139(1) of the Act for the A.Y. 2008-09 on 31.03.2009 declaring a total income of Rs.11,20,550/-. Thereafter, a search and seizure operation was conducted on 24.01.2012 in the residential premises of the assessee wherein no incriminating material was found and/or seized. Consequent upon such search and seizure action, notice u/s. 153A of the Act dated 01/10/2013 was issued and in response vide letter dated 23.12.2013 the assessee requested the Assessing Officer to treat the original return filed u/s 139(1) of the Act as return in response to notice u/s. 153A of the Act. Thereafter, notices u/s. 143(2) and 142(1) of the Act were duly issued and served on the appellant although the impugned assessment for the year under appeal stood completed since no proceedings were pending and the last date to issue the Notice had already expired. However, the assessment was completed u/s. 153A/143(3) of the Act on 31/03/2014 assessing the total income at Rs.12,70,550/- wherein deduction of Rs.1,50,000/- claimed u/s 24(b) of the Act was disallowed. Based on the said disallowance/addition of Rs.1,50,000/-, notice u/s. 271(1)(c) of the Act dated 22/08/2023 was issued by the Assessing Officer and the reply objecting to the same was duly submitted. Thereafter, the Assessing Officer passed the order u/s.271(1)(c) of the Act on 31/03/2023 wherein a penalty of Rs.50,985/- being 100% of the amount of tax sought to be evaded was imposed u/s. 271(1)(c) of the Act.

3.

Aggrieved by the said order, the assessee preferred appeal before the ld. CIT(A), wherein, the appeal of the assessee has been dismissed and the penalty u/s 271(1)(c) as made by the Assessing Officer was confirmed by ld. CIT(A).

4.

Being aggrieved, the assessee is in appeal before us. At the time of hearing, the learned counsel of the assessee pressed the Ground No.5 , 1932, 1934 & 1935/Kol/2025 Ujjal Sinha raised before us contending that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act is vague as the said notice is without mentioning any specific charge and therefore, null and void ab initio and consequently, the entire proceedings need to be quashed and penalty imposed needs to be deleted in full. In support of his contention, the ld. counsel has placed reliance on the decision of Commissioner of Income-tax v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250/218 Taxman 423/359 ITR 565 (Karnataka) wherein it was held that the imposition of penalty under section 271(1)(c) of the Act is bad in law and invalid for the reasons where the show cause notice under section 274 of the Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income.

5.

Contrary to that, the ld. DR supports the impugned order thereby submitting that the assessee did not participate in the proceedings and once the assessee withdrew the appeal against the assessment order.

6.

We have heard the submissions of the counsels of the respective parties and perused the materials available on record. Before adverting, it will be relevant to reproduce the notice u/s 274 r.w.s 271 of the Act issued by the department, which is as under:

6.1 We find that the above notice u/s 274 r.w.s. 271 of the Act has been initiated on 31.03.2014 wherein the Assessing Officer has not either struck off the irrelevant limb or specified the limb under which the penalty was proposed to be levied. In other words, the Assessing Officer , 1932, 1934 & 1935/Kol/2025 Ujjal Sinha has stated both the limbs in the said notices. Therefore, we find merit in the contention of the assessee that the notice has been issued in standard format and in a mechanical manner without application of mind, with the result that assessee could not reply the correct charge under which the penalty was proposed to be levied. We further find that Hon'ble Jurisdictional High Court in the case of KPC Medical College and Hospital vs. PCIT reported in [2025] 173 taxmann.com 581 (Calcutta) dated 19-03-2025 on similar issue has decided in favour of the assessee following the cited decision of ld. counsel in the case of CIT v. Manjunatha Cotton & Ginning Factory (supra) by observing and holding as under: -

“13. We have perused the notice and we find that none of the relevant columns have been indicated nor have the irrelevant columns been struck off. Identical issue came up for consideration wherein one of the questions which was considered was with regard to the validity of the notice issued under Section 274 read with 271 wherein the Court also took into consideration the effect of Section 271AAB read with 162 and answered the questions in favour of the assessee and against the revenue in the following terms : "In CIT v. SSA'S Emerald Meadows [2016] 73 taxmann.com 241 (Karnataka) the High Court of Karnataka following the decision in Commissioner of Income-tax v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250/218 Taxman 423/359 ITR 565 (Karnataka) held that the imposition of penalty under section 271(1)(c) of the Act is bad in law and invalid for the reasons where the show cause notice under section 274 of the Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The said decision of the High Court of Karnataka was affirmed by the Hon'ble Supreme Court in the decision reported in Commissioner of Income-tax v. SSA'S Emerald Meadows [2016] 73 taxmann.com 248/242 Taxman 180 (SC). On the same lines it is the decision of this court in Pr. CIT v. Brijendra Kumar Poddar in [ITAT No. 215 of 2018, dated 23-11-2021]. As pointed out earlier, the show cause notice issued under Section 274 read with Section 271 of the Act did not furnish any particulars and all the relevant columns have been left blank. Thus, by applying the legal position in the aforementioned decision, this court has no hesitation to hold that the show cause notice was bad in law consequently the initiation of penalty proceedings is vitiated."

ITA Nos.1931, 1932, 1934 & 1935/Kol/2025 Ujjal Sinha 14. Thus, for the above reasons, the appeals filed by the assessee are allowed and the substantial questions of law are answered in favour of the assessee.” 6.2 Respectfully following the above decision of the Hon'ble Jurisdictional High Court, we hold that notice issued u/s 274 r.w.s. 271 of the Act dated 31.03.2014 of the Act is invalid and accordingly, the consequent assessment framed is also invalid and is hereby quashed. is allowed. the facts and issues involved in all the appeals are identical, therefore, our findings/directions given above in the above will mutatis mutandis apply to 1934 & 1935/Kol/2025 also. Hence, 1934 & 1935/Kol/2025 are allowed.

8.

In the result, all the captioned appeals of the assessee are allowed.

Kolkata, the 13th November, 2025.

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