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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri Rajpal Yadav, Vice- & Shri Rajesh Kumar]
ORDER Per Shri Rajesh Kumar, AM:
This is an appeal preferred by the revenue against the order of the Commissioner of Income Tax(Appeals)-3, Kolkata [hereinafter referred to as ‘CIT(A)’] dated 12.06.2020 for the assessment year 2010-11.
The only issue raised by the revenue is against the order of Ld. CIT(A) deleting the penalty of Rs. 70,55,520/- as imposed by the AO u/s 271(1)(c ) of the Income Tax Act, 1961 (hereinafter referred to as the Act) by holding that the notice issued u/s 274 of the Act is defective as it does not specify the limb on which the penalty was proposed to be levied.
At the outset, the Ld. D.R. requested for adjournment of the case on the ground that he needs to file condonation petition as the appeal was not filed within the due time. However upon going through the order of Ld. CIT(A) as well as the appeal in Form No. 36 we note that there is no delay of filing the appeal as the mistake in calculation of limitation period has occurred because of wrong mentioning of date of the order in the appeal memo. The date of order is 12.06.2020 whereas the date mentioned in the memorandum of appeal is 21.01.2016 and hence discrepancy has Ambuja Neotia Holdings Pvt. Ltd. crept in. We are therefore proceedings to hear the appeal on merit as the issue raised in the revenue’s appeal is covered in favour of the assessee in two decision of Hon’ble Jurisdictional High Courts namely CIT vs. SSA’s Emerald Meadows in of 2015 order dated 23.11.2015 and in the case of CIT vs. Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565.
The facts in brief are that the penalty proceedings were initiated by the AO vide notice dated 13.08.2015 passed u/s 274 read with Section 271(1)(c ) of the Act and finally imposed penalty u/s 271(1)(c ) of the Act of Rs. 70,55,520/- being 100% of the tax sought to be evaded by the assessee on undisclosed income of Rs. 6,22,72,886/-. The Ld. CIT(A) deleted the penalty on the ground that the notice issued u/s 274 read with Section 271(1)(c ) of the Act dated 13.08.2015 is suffering from substantive defect which is incorrect as the limb on which the penalty was proposed to be levied was not highlighted or indicated in the notice. The Ld. CIT(A) while deleting the penalty relied on the decision of Hon’ble Calcutta High Court and several other decisions as discussed in the appellate order.
After hearing the rival parties and perusing the material on record, we find that the notice u/s 274 read with Section 271(1)(c ) dated 13.08.2015 has been issued in a mechanical manner and in standard format without mentioning one of the two limbs on which the penalty was proposed to be levied. In other words, the notice mentioned both the limbs i.e. considering of record as well as furnishing of income inaccurate manner which is not permissible under the Act. In view of these facts we do not find any infirmity in the order of Ld. CIT(A). Non-mentioning of relevant limb in the penalty notice in substantive defect and infirmity which is not curable. The case of the assessee is squarely covered by several decisions as discussed by the Ld. CIT(A) at length in the appellate order including the decision of Hon’ble Jurisdictional High Court in the case of CIT vs. SSA’s Emerald Meadows (supra) and in the case of CIT vs. Manjunatha Cotton and Ginning Factory (supra). In view of these facts and Ambuja Neotia Holdings Pvt. Ltd. circumstances of the case, we are inclined to uphold the order passed by the Ld. CIT(A) by dismissing the revenue’s appeal.
In the result, the appeal of the revenue is dismissed.
Order is pronounced in the open court on 9th May, 2022