SH. AMAN MEHTANI,NEW DELHI vs. DCIT, FARIDABAD

The grounds of appeal

The assessee filed its return of income declaring income of Rs.27,15,360/- on 6/10/2010. Assessment u/s 143(3) of the Income Tax Act, 1961 was made on 28/12/2011 at an income of Rs.38,48,450/-. While completing the assessment the A.O made additions in the total income of the assessee. The A.O also initiated the penalty proceedings u/s 271(1)(c) of the Act in respect of above additions and notice u/s 274 read with Section 271 was issued on 2812-2011.

Being aggrieved, the assessee filed appeal before the CIT(A) who vide order dated 19/11/2012 deleted the additions of Rs.10,00,000/- and confirmed the addition of Rs.1,33,088/- stating that the assessee did not pressed for the ground No. 3 of the appeal as the issue of addition of Rs.1,33,088/- on account of deduction claim was under section 24(b) of the Act.

The penalty proceedings were started u/s 271(1) (c) and the A.O imposed penalty of Rs.41,125/-. The CIT(A) dismissed the appeal of the assessee.

The Ld. AR submitted that the Assessing Officer had not specifically mentioned the charge on the basis of which the penalty was framed upon the assessee. The Ld. AR produced the notice dated 28.12.2011 issued under Section 274 r.w.s 271 of the Income Tax Act, 1961. The Ld. AR further submitted that the matter is covered by the Hon'ble Supreme Court decision in case of CIT Vs. M/s SSA’ Emerald Meadows wherein the decision of CIT Vs. Manju Nath Cotton and Ginning Factory 359 ITR 565 was considered.

The Ld. DR relied upon the orders of the Assessing Officer and the CIT(A).

We have heard both the parties and perused the material available on record. There is no concealment in the present case. The Assessee has also filed all the details during the regular assessment proceedings. From the notice dated 28.12.2011 produced by the Ld. AR during the hearing, it can be seen that the Assessing Officer was not sure under which provisions of Section 271 of the Income Tax Act, 1961, the assessee is liable for penalty. The issue is squarely covered by the decision of the Hon'ble Supreme Court in case of M/s SSA’ Emerald Meadows. The extract of the Hon’ble Karnataka High Court in M/s. SSA’ Emerald Meadows are as under which was confirmed by the Hon’ble Apex Court: “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 law as 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 COMMISSIONER OF INCOME TAX -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.”