ACIT, CENTRAL CIRCLE - 4(3), KOLKATA vs. M/S. VIJAYSHREE AUTOCOM LTD., KOLKATA

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ITA 2286/KOL/2018Status: DisposedITAT Kolkata23 May 2022AY 2013-142 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty proceedings were invalid and void ab initio due to a defective notice. Consequently, the Revenue's appeal became infructuous.

What were the facts?

The Revenue appealed against a CIT(A) order that reduced a penalty from 30% to 10%. The ITAT noted that the assessee's cross-appeal on the same penalty had already been allowed.

What were the issues?

Whether penalty proceedings initiated with a defective notice, failing to specify the relevant clause, are valid. The validity of penalty levied under Section 271AAB.

Which sections of the Income-tax Act were involved?

Section 274,Section 271AAB

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Before: Shri Sanjay Garg & Shri Rajesh Kumar]

Hearing: 23.02.2022Pronounced: 23.05.2022

ORDER

Per Shri Rajesh Kumar, AM:

1.

This is an appeal preferred by the revenue against the order of the Commissioner of Income Tax(Appeals)-21, Kolkata [hereinafter referred to as ‘CIT(A)’] dated 27.08.2018 for the assessment year 2013-14.

This appeal was heard on 23rd February, 2022 along with Cross appeals filed 2. by the assessee in & 2375/Kol/2018 for AYs. 2013-14 and 2014-15. It was pointed out by the Registry that the appeals by the assessee have been disposed off and allowed by the Bench however the cross appeals by the revenue has escaped the attention. After carefully perusing the facts on record we find that we have already decided the issue of penalty u/s 271AAB of the Income Tax Act, 1961 (hereinafter referred to as the Act) in the assessee’s appeal wherein we have quashed the penalty proceedings being based on the defective notice wherein we have held that the notice suffers from substantive defect of not mentioning the clause under which the penalty was proposed to be levied. Both these appeals by the assessee as well as by the revenue were heard together however at the time of passing the order this appeal has inadvertently not stated to be dismissed. Hence this appeal is being decided separately by passing this order.

M/s Vijayshree Autocom Ltd.

3.

The issue raised by the revenue is against the partial relief allowed to the assessee by the Ld. CIT(A) by reducing the quantum of penalty from 30% to 10%. Since we have already allowed the cross appeal of the assessee by holding that the penalty proceedings suffered from the vice of being invalid and void ab-initio as the same was initiated by issuing of invalid notice u/s 274 read with Section 271AAB of the Act which does not mention the clause under which the penalty was proposed to be levied by following various Co-ordinate bench cases and also the decision of Hon’ble Madras High Court in the case of PCIT vs. Shri R. Elangovan in Tax Case Appeal Nos. 770 & 771 and CMP No. 18581 of 2018 dt. 30/03/2021. In view of our decision in the assessee’s appeal, this appeal of the revenue become infructuous and is dismissed.

7.

In the result, the appeal of the revenue is dismissed.

Order is pronounced in the open court on 23rd May, 2022

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