Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: Sri Rajpal Yadav & Sri Manish Borad
order
: March 31st, 2022 ORDER
Per Manish Borad, Accountant Member:
This appeal filed by the assessee pertaining to the Assessment Year (in short “AY”) 2009-10 is directed against the order of ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC)[in short ld. “CIT(A)”] dated 24.11.2021 vide Appeal No.CIT(A), Kolkata-3/10051/2017- 18 which is arising out of the assessment order framed u/s 271(1)(c) of the Income Tax Act, 1961 (in short the “Act”) dated 28.04.2017 by ITO, Ward- 8(3), Kolkata.
The assessee is in appeal before the Tribunal raising the following grounds: “
1. That the imposition of penalty is unsustainable in law in the absence of pointing out the specific charge in the notice issued by the assessing officer.”
3. At the outset, ld. Counsel for the assessee stated that the impugned penalty proceedings are bad in law as defective notice u/s 274 r.w.s. 271(1)(c) of the Act was issued as no specific charge was levelled against the assessee. Reliance placed on the judgment of the jurisdictional High Court
I.T.A. No.: 77/Kol/2022 Assessment Year: 2009-10 Lords Polymer India Pvt. Ltd. in the case of Pr. CIT vs. Dr. Murari Mohan Koley, ITAT No. 306 of 2017 dated 18.07.2018.
Per contra, during the course of hearing, ld. D/R submitted that this legal issue was not raised by the assessee before the ld. CIT(A) and, therefore, the same cannot be raised for the first time before this Tribunal.
We have heard rival contentions and perused the records placed before us. The assessee has raised the legal ground challenging the legality of penalty proceedings initiated u/s 271(1)(c) of the Act wherein penalty of Rs.1,88,615/- has been levied. Ld. D/R has submitted that this legal issue was not raised by the assessee before the ld. CIT(A). We, however, do not find any merit in this contention in view of the judgment of the Hon’ble Supreme Court of India in the case of National Thermal Power Co. Ltd. vs. Commissioner of Income-tax reported in [1998] 229 ITR 383 (SC) wherein the Hon’ble Court has held that legal issue can be raised at any point of time. We, therefore, respectfully following the ratio laid down by the Hon’ble apex Court, admit this legal ground for adjudication at this stage.
We notice that during the assessment proceedings u/s 271(1)(c) of the Act carried out on the case of the assessee company an amount of Rs.6,28,718/- was held to be bogus and unexplained sundry creditor and penalty proceedings were initiated u/s 271(1)(c) of the Act for furnishing of inaccurate particulars of income. It was followed by issue of notice u/s 274 r.w.s. 271(1)(c) of the Act dated 29.12.2011 place on record. Going through the notice, we find that the Assessing Officer (in short ld. “AO”) mentioned both the limbs of Section 271(1)(c) of the Act stating that, “have concealed the particulars of your income or ………………. furnished inaccurate particulars of such income.”
The above content in the show cause notice clearly shows that ld. AO was not certain as to on which limb or for which charge the assessee is liable to be penalised. Under the similar facts and circumstances, Hon’ble jurisdictional High Court in the case of Dr. Murari Mohan Koley (supra) has held as follows:
I.T.A. No.: 77/Kol/2022 Assessment Year: 2009-10 Lords Polymer India Pvt. Ltd.
We find that there was no specific charge against the assessee in the notice. Revenue has missed out their opportunity to subject the assessee to the penalty proceeding by not issuing a proper notice. No specific case has been made out by the Revenue as to why the matter should be remanded except that the assessee had not participated properly in the assessment proceedings but for that reason best judgment assessment has been made and the income, which had escaped assessment has been added to the income of the assessee. It was incumbent upon the Revenue to make out a specific case for imposition of penalty, on which count the Revenue has failed.
On going through the above finding of the Hon’ble jurisdictional High Court, the same is found to be squarely applicable on the facts of the instant case so much so that in the instant case also Revenue failed to level any specific charge against the assessee which has, therefore, vitiated the penalty proceedings from the very beginning itself. Therefore, since notice issued for levy of penalty is invalid and defective, penalty proceedings carried thereafter deserves to be quashed. We accordingly order so, allow the legal ground raised by the assessee and delete the penalty of Rs.1,88,615/- confirmed by the ld. CIT(A). In the result, the sole ground raised by the assessee is allowed.
In the result, the appeal filed by the assessee is allowed.
Kolkata, the 31st March, 2022.