MILLENIUM CONCRETE CREATION PVT. LTD.,DALKHOLA vs D.C.I.T.,CIRCLE-2, JALPAIGURI

Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA

Before: Sri J. Sudhakar Reddy, Hon’ble & Sri Aby T. Varkey, Hon’ble

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘C’ BENCH, KOLKATA (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member) [VIRTUAL COURT HEARING] Assessment Years: 2012-13 Millenium Concrete Creation Pvt. Ltd.........................................................………………....….....Appellant Subhash Pally Dalkhola West Bengal – 733 201 [PAN : AADCM 9921 G] Vs. Deputy Commissioner of Income Tax, Circle-2, Jalpaiguri......……...........….……....…… Respondent Appearances by: Shri Subash Agarwal, Advocate, appeared on behalf of the assessee. Shri Dhrubojyoti Ray, Addl. CIT D/R, appearing on behalf of the Revenue. Date of concluding the hearing : July 22nd, 2020 Date of pronouncing the order : August 19th, 2020 ORDER Per J. Sudhakar Reddy, AM :-

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – Jalpaiguri, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 14/12/2018, for the Assessment Year 2012-13, wherein, he confirmed the penalty levied u/s 271(1)(c) of the Act, by the Assessing Officer.

At the outset we find that there is a delay of 122 (One Hundred Twenty Two) days in filing of this appeal by the assessee. After perusing the petition for condonation, we are convinced that the assessee was prevented by sufficient cause from filing the appeal in time. Hence the delay is condoned and the appeal is admitted.

The sole grievance of the assessee is that the notice issued u/s 274 of the Act, is defective as it does not spell out the charge against the assessee i.e., as to whether the assessee has furnished inaccurate particulars of income or has concealed his income, rendering the penalty order passed u/s 271(1)(c) of the Act, to be bad in law.

The ld. D/R opposed the contention of the assessee and submitted that the assessee has never appeared before the Assessing Officer nor before the ld. CIT(A) and order had to be passed u/s 144 of the Act by the Assessing Officer during the assessment proceedings and an ex-parte order has to be passed in the proceedings u/s 271(1)(c) of the Act. He further pointed out that the assessee had failed to appear before the ld. CIT(A) also and under these circumstances, at best, the issue should be remanded to the file of the Assessing Officer or the ld. CIT(A) for adjudication of this issue.

Assessment Years: 2012-13 Millenium Concrete Creation Pvt. Ltd Millenium Concrete Creation Pvt. Ltd 4.1. The ld. Counsel for the assessee, in reply submitted that the issue as to whether The ld. Counsel for the assessee, in reply submitted that the issue as to whether The ld. Counsel for the assessee, in reply submitted that the issue as to whether the notice issued u/s 274 r.w.s. 271(1)(c) of the Act on 28/03/2015 is a valid notice the notice issued u/s 274 r.w.s. 271(1)(c) of the Act on 28/03/2015 is a valid notice the notice issued u/s 274 r.w.s. 271(1)(c) of the Act on 28/03/2015 is a valid notice under law or not is a jurisdictional issue and the assessee can take it up at any point of r law or not is a jurisdictional issue and the assessee can take it up at any point of r law or not is a jurisdictional issue and the assessee can take it up at any point of time. He filed a copy of the said notice and submitted that the inapplicable portions time. He filed a copy of the said notice and submitted that the inapplicable portions time. He filed a copy of the said notice and submitted that the inapplicable portions were not struck off thus making the charge for levy of penalty ambiguous in such no were not struck off thus making the charge for levy of penalty ambiguous in such no were not struck off thus making the charge for levy of penalty ambiguous in such notice.

After hearing rival contentions, we find that the notice issued u/s 274 r.w.s. After hearing rival contentions, we find that the notice issued u/s 274 r.w.s. After hearing rival contentions, we find that the notice issued u/s 274 r.w.s. 271(1)(c) of the Act dt. 28/03/2015, 271(1)(c) of the Act dt. 28/03/2015, did not specify the charges against which the did not specify the charges against which the penalty was sought to be imposed. Th penalty was sought to be imposed. The penalty imposed in pursuance of such defective e penalty imposed in pursuance of such defective notice is not sustainable in law. notice is not sustainable in law. The Hon’ble Jurisdictional High Court in the case of The Hon’ble Jurisdictional High Court in the case of Pr. CIT vs. Dr. Murari Mohan Koley in ITAT No. 306 of 2017, G.A. No. 2968 of 2017 CIT vs. Dr. Murari Mohan Koley in ITAT No. 306 of 2017, G.A. No. 2968 of 2017 CIT vs. Dr. Murari Mohan Koley in ITAT No. 306 of 2017, G.A. No. 2968 of 2017, judgment dt. 18th July, 2018, held as follows: July, 2018, held as follows:- “10. The ld. Counsel for the assessee drew our attention to the decision of the Hon'ble 10. The ld. Counsel for the assessee drew our attention to the decision of the Hon'ble 10. The ld. Counsel for the assessee drew our attention to the decision of the Hon'ble Karnataka High Court in the case of Karnataka High Court in the case of CIT vs. SSA's Emerald Meadows in of 2015 's Emerald Meadows in ITA No.380 of 2015 dated 23.11.2015 wherein the dated 23.11.2015 wherein the Hon'ble Karnataka High Court following its own decision in Hon'ble Karnataka High Court following its own decision in the case of CIT vs Manjunatha Cotton and Ginning CIT vs Manjunatha Cotton and Ginning factory (2013) 359 ITR 565 took a view factory (2013) 359 ITR 565 took a view that imposing of penalty u/s. 271(1)(c) of the Act is ba that imposing of penalty u/s. 271(1)(c) of the Act is bad in law and invalid for the reason d in law and invalid for the reason that the show cause notice u/s 274 of the Act does not specify the charge against the that the show cause notice u/s 274 of the Act does not specify the charge against the that the show cause notice u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of assessee as to whether it is for concealment of particulars of income or furnishing of assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The ld. Couns inaccurate particulars of income. The ld. Counsel further brought to our notice that as el further brought to our notice that as against the decision of the Hon'ble Karnataka High Court the revenue preferred an appeal against the decision of the Hon'ble Karnataka High Court the revenue preferred an appeal against the decision of the Hon'ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon'ble Supreme Court by its order dated 05.08.2016 in SLP in CC No.11485 of 2016 and the Hon'ble Supreme Court by its order dated 05.08.2016 in SLP in CC No.11485 of 2016 and the Hon'ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the d dismissed the SLP preferred by the department. The ld. Counsel also brought to our notice epartment. The ld. Counsel also brought to our notice the decision of the Hon'ble Bombay High Court in the case of CIT vs Shri Samson Perinchery the decision of the Hon'ble Bombay High Court in the case of CIT vs Shri Samson Perinchery the decision of the Hon'ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon'ble Bombay High Court following in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon'ble Bombay High Court following in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon'ble Bombay High Court following the decision of the the Hon'ble Karnataka High Court in the case of of Hon'ble Karnataka High Court in the case of of CIT vs Manjunatha CIT vs Manjunatha Cotton and Ginning factory (supra) came to the conclusion that imposition of penalty on factory (supra) came to the conclusion that imposition of penalty on factory (supra) came to the conclusion that imposition of penalty on defective show cause notice without specifying the defective show cause notice without specifying the charge against the assessee cannot be charge against the assessee cannot be sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna Bhattacharya vs ACIT in ITA NO 1303/Kol/2010 dated 06.11.2015 wherein identical Bhattacharya vs ACIT in ITA NO 1303/Kol/2010 dated 06.11.2015 wherein identical Bhattacharya vs ACIT in ITA NO 1303/Kol/2010 dated 06.11.2015 wherein identical proposition has been followed by the Tribunal proposition has been followed by the Tribunal. The learned DR relied on the order of the . The learned DR relied on the order of the CIT(A).

11.

We have already observed that the show cause notice issued in the present case u/s 274 11. We have already observed that the show cause notice issued in the present case u/s 274 11. We have already observed that the show cause notice issued in the present case u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealing of the Act does not specify the charge against the assessee as to whether it is for concealing of the Act does not specify the charge against the assessee as to whether it is for concealing particulars of income or furnishing inaccurate particulars of income. The show cause notice come or furnishing inaccurate particulars of income. The show cause notice come or furnishing inaccurate particulars of income. The show cause notice u/s 274 of the Act does not strike out the inappropriate words. u/s 274 of the Act does not strike out the inappropriate words. In these circumstances, we are of the view that imposition of penalty cannot be sustained. In these circumstances, we are of the view that imposition of penalty cannot be sustained. In these circumstances, we are of the view that imposition of penalty cannot be sustained. The plea of the ld. Counsel for the assessee which is based on the decisions referred to in the el for the assessee which is based on the decisions referred to in the el for the assessee which is based on the decisions referred to in the earlier part of this order has to be accepted. We therefore hold that imposition of penalty in earlier part of this order has to be accepted. We therefore hold that imposition of penalty in earlier part of this order has to be accepted. We therefore hold that imposition of penalty in the present case cannot be sustained and the same is directed to be cancelled. " the present case cannot be sustained and the same is directed to be cancelled. " the present case cannot be sustained and the same is directed to be cancelled. " Mr. Chowdhury in course of argument has urged us to remand the matter before the dhury in course of argument has urged us to remand the matter before the dhury in course of argument has urged us to remand the matter before the assessing officer. According to him, this was a technical flaw, which the Revenue must be assessing officer. According to him, this was a technical flaw, which the Revenue must be assessing officer. According to him, this was a technical flaw, which the Revenue must be given a chance to cure. The reason why the penalty order was not sustained by the Tribunal given a chance to cure. The reason why the penalty order was not sustained by the Tribunal given a chance to cure. The reason why the penalty order was not sustained by the Tribunal appears from the passages of the decision of the Tribunal quoted earlier in this judgement. pears from the passages of the decision of the Tribunal quoted earlier in this judgement. pears from the passages of the decision of the Tribunal quoted earlier in this judgement.

Assessment Years: 2012-13 Millenium Concrete Creation Pvt. Ltd Millenium Concrete Creation Pvt. Ltd We find that there was no specific charge against the assessee in the notice. Revenue has We find that there was no specific charge against the assessee in the notice. Revenue has 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 proceed missed out their opportunity to subject the assessee to the penalty proceeding by not issuing ing by not issuing a proper notice. No specific case has been made out by the Revenue as to why the matter a proper notice. No specific case has been made out by the Revenue as to why the matter 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 should be remanded except that the assessee had not participated properly in the should be remanded except that the assessee had not participated properly in the assessment proceedings but for that reason best judgment assessment assessment proceedings but for that reason best judgment assessment has been made and has been made and the income, which had escaped assessment has been added to the income of the assessee. It the income, which had escaped assessment has been added to the income of the assessee. It 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 was incumbent upon the Revenue to make out a specific case for imposition of penalty, on was incumbent upon the Revenue to make out a specific case for imposition of penalty, on which count the Revenue has failed. which count the Revenue has failed. Under such circumstances, we do not find any reason to interfere with the Tribunal's order. es, we do not find any reason to interfere with the Tribunal's order. es, we do not find any reason to interfere with the Tribunal's order. The Tribunal's order does not suffer from any error of law. No substantial question of law is The Tribunal's order does not suffer from any error of law. No substantial question of law is The Tribunal's order does not suffer from any error of law. No substantial question of law is involved in this appeal. Hence, the same is dismissed. Hence, stay petition is also dismisse involved in this appeal. Hence, the same is dismissed. Hence, stay petition is also dismisse involved in this appeal. Hence, the same is dismissed. Hence, stay petition is also dismissed. There shall be no order as to costs. There shall be no order as to costs.

The proposition of law laid down in the above case The proposition of law laid down in the above case-law is squarely applicable in squarely applicable in the present case. We, therefore, respectfully follow the present case. We, therefore, respectfully following the said decision of the the said decision of the Hon’ble Jurisdictional High Court and and, quash the impugned penalty imposed by the penalty imposed by the Assessing Officer under section 271(1)(c) under section 271(1)(c) of the Act as confirmed by the Ld. CIT(A). confirmed by the Ld. CIT(A).

In the result, appeal of the assessee In the result, appeal of the assessee is allowed. Kolkata, the Kolkata, the 19th day of August, 2020.

MILLENIUM CONCRETE CREATION PVT. LTD.,DALKHOLA vs. D.C.I.T.,CIRCLE-2, JALPAIGURI