DCIT, CIRCLE-1, DURGAPUR, DURGAPUR vs. DEBEANJANA HARD COKE PRIVATE LIMITED, HETEDOBA

2.1 The Ld. AR pointed out that that the Ld. CIT(A) had granted relief on the ground that the Ld.AO had not pointed out specifically which particulars of income were found to be inaccurate. The Ld. AR submitted that on this ground alone, the assessee deserved relief and the same was granted by the Ld. CIT(A). Thereafter, the Ld. AR took us through various portions of the impugned order in which the Ld. CIT(A) had deleted the impugned penalty even on merits.

Debeanjana Hard Coke Private Limited 3. We have carefully considered the submissions of Ld. DR and Ld. AR. We have also gone through the grounds of appeal carefully and the records before us. To appreciate the controversy regarding the technical issue, the relevant portion from the impugned order deserves to be extracted as under:

“6. I have considered the facts of the case, penalty order and appellant’s written submissions. The AO levied the penalty u/s. 271(1)(c) of the Act amounting to Rs. 2,42,95,697/- in respect of five additions i.e. addition of Rs.1,24,298/- being undisclosed interest on STDR, addition of Rs. 7,32,43,814/- on account of unexplained cash credit in the form of commodity profit and addition of Rs. 13,00,000/- on account of unexplained cash credit in respect of application of money, addition of Rs. 1,68,648/- on account of disallowance of excess depreciation and addition of Rs. 45,956/- on account of disallowance u/s. 10 r.w.s. 36(1)(v) of the Act. At the outset, the appellant claims that the AO erred in initiating penalty proceedings u/s 271(1)(c) casually and without identification of the default for which penalty proceedings were initiated and the AO erred in imposing penalty u/s 271(1)(c) for furnishing inaccurate particulars of income without identifying the particulars of income which were furnished by the assessee and found inaccurate by the AO. To support its contention, the appellant placed reliance on the decision of the Hon’ble Apex Court decision in dismissing SLP in the case of SSA Emerald Meadows (supra). Further, the appellant has contended thatno penalty can be levied when assessed income is estimated or estimated amount has been added to the total income of the assessee. I have carefully considered the penalty order, assessment order and case-laws relied upon by the appellant. I have also perused the penalty notice dated 31-03-2015 issued by the AO. I find that the AO has not specified as to which limb of sec. 271(1)(c) of the Act, the penalty proceedings had been initiated i.e. whether for concealment of particulars of income or for furnishing inaccurate particulars of income. For this proposition, I rely on the case of CIT vs. SSA’s Emerald Meadows (2016) 73 taxmann.com 241 dated 23-11-2015 wherein the following questions were raised before the Hon'ble Karnartaka High Court:- “ (1) Whether, omission if assessing officer to explicitly mention that penalty proceedings are being initiated for furnishing of inaccurate particulars or that for concealment of income makes the penalty order liable for cancellation even when it has been proved beyond reasonable doubt that the assessee had concealed income in the facts and circumstances of the case? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that the penalty notice under Section 274 r.w.s. 271(1)(c) is bad in law and invalid despite the amendment of Section 271(1B) with retrospective effect and by virtue of the amendment, the assessing officer has initiated the penalty by properly recording the satisfaction for the same? (3) Whether on the facts and in the circumstances of the case, the Tribunal was justified in deciding the appeals against the Revenue on the basis of notice issued under Section 274 without taking into consideration the Debeanjana Hard Coke Private Limited assessment order when the assessing officer has specified that the assessee has concealed particulars of income? The Hon'ble Karnartaka High Court concluded as under:- “3. The Tribunal has allowed the appeal filed by the assessee holding the notice issued by the Assessing Officer under Section 274 read with Section 271(1)(c) of the Income Tax Act, 1961 (for short ‘the Act’) to be bad in lawas it did not specify which limb of Section 271(1)(c) of the Act, the penalty proceedings had been initiated i.e., whether for concealment of particulars of income or furnishing of inaccurate particulars of income. The Tribunal, while allowing the appeal of the assessee, has relied on the decision of the Division Bench of this Court rendered in the case of CIT vs. Manjunatha Cotton And Ginning Factory (2013) 359 ITR 565.

4. In our view, since the matter is covered by judgment of the Division Bench of this Court, we are of the opinion, no substantial question of law arises in this appeal for determination by this Court. The appeal is accordingly dismissed.” Thus, on this count alone the penalty order requires to be quashed.”(emphasis added) It is obvious that the Revenue has not taken any specific ground regarding this matter and hence on this ground alone once the penalty has been deleted then there would be no occasion to interfere with the Ld. CIT(A)’s order since no specific ground has been taken by the Revenue. Accordingly, we dismiss the Revenues’ appeal on the ground that the technical issue adjudicated by the Ld. CIT(A) would be treated as becoming final since no ground has been taken by the Revenue against that. We also do not feel it necessary to delve any deeper into the merit of the case since the technical issue itself has been decided in favour of the assessee.

Order pronounced on 21.07.2025