RAJ KISHORE SINGH,RAIGARH vs. INCOME TAX OFFICER, RAIGARH

IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR BEFORE SHRI R. K. PANDA, ACCOUNTANT MEMBER AND MS. SUCHITRA KAMBLE, JUDICIAL MEMBER ITA No.118/RPR/2018 Assessment Year : 2010-11 Raj Kishore Singh, ITO- 1, Prop. Basudeo Bus Service, Raigarh (CG). Kabir Chowk, Jute Mill Road, Vs. Raigarh (CG).

PAN : AUPPS6770E (Appellant) (Respondent)

: Assessee by Shri S. R. Rao, Adv. : Shri D. K. Jain, DR Department by Date of hearing : 09-08-2018 Date of pronouncement : 09-08-2018

O R D E R PER R. K. PANDA, AM : This appeal filed by the assessee is directed against the order dated 02.04.2018 of the ld. CIT(A), Bilaspur (CG) relating to assessment year 2010-11. 2. Facts of the case, in brief, are that the assessee is engaged in bus-plying business. The return of income for the impugned assessment year was filed on 29.03.2011 declaring total income of Rs.4,95,680/-. The assessment was completed u/s 143(3) determining the total income at Rs.8,90,080/- wherein the

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Assessing Officer made addition on account of disallowance of depreciation of

Rs.3,58,151/- and disallowance out of expenses of Rs.50,000/-. The assessee

did not file any appeal. Subsequently, the Assessing Officer levied penalty of

Rs.1,05,000/- u/s 271(1)(c) of the I.T. Act, 1961 on account of excess claim of

depreciation.

before the Tribunal.

issued u/s 274 r.w.s. 271 submitted that the show cause notice issued u/s 274

r.w.s. 271 did not define the nature of default i.e. whether the penalty is levied

for concealment of income or for furnishing of inaccurate particulars of income.

He submitted that the Assessing Officer imposed the penalty u/s 271(1)(c) in

this case on the ground that the assessee has concealed his income and furnished

inaccurate particulars of income. Referring to the decision of the Hon’ble

Karnataka High Court in the case of CIT vs. M/s SSA’S Emerald Meadows vide

ITA No.380 of 2015 order dated 23.11.2015, he submitted that the Hon'ble High

Court in the said decision, following the decision in the case of Manjunath

Cotton and Ginning Factory reported in 359 ITR 565, had upheld the decision

of the Tribunal cancelling the penalty and dismissed the appeal filed by the

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Revenue on the ground that the notice issued by the Assessing Officer u/s 274

r.w.s. 271 is bad in law since it did not specify under which limb of section

271(1)(c) penalty proceedings have been initiated. He submitted that the SLP

filed by the Revenue has been dismissed by the Hon’ble Supreme Court.

Referring to various decisions filed in the Paper Book, he submitted that under

identical circumstances various Benches of the Tribunal are cancelling the

penalty so levied where the inappropriate words are not struck off from the

notice issued u/s 274 r.w.s. 271 of the Act. He accordingly submitted that on

this preliminarily ground itself the order of the ld. CIT(A) sustaining the penalty

levied by the Assessing Officer should be set-aside and the penalty should be

cancelled.

CIT(A). He submitted that mere non-striking of the inappropriate words will

not invalidate the initiation of penalty proceedings and the provisions of section

292B/292BB will come to rescue of the Department.

perused the material available on record. A perusal of the notice issued u/s 274

r.w.s. 271 shows that the inappropriate words in the said notice has not been

struck off i.e. the notice does not specify under which limb of section 271(1)(c)

the penalty proceedings had been initiated i.e. whether for concealment of

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income or for furnishing of inaccurate particulars of income. We find the

Hon’ble Karnataka High Court in the case of M/s SSA’S Emerald Meadows

(supra) has observed as under :-

“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.”

Apex Court. Further, the various Benches of the Tribunal following the above

decisions are cancelling the penalty so levied by the Assessing Officer and

confirmed by the ld. CIT(A) on account of non-striking of the inappropriate

words from the notice issued u/s 274 r.w.s. 271 of the Act. Since in the instant

case, the Assessing Officer has not struck off the inappropriate words in the

notices issued u/s 274 r.w.s. 271, therefore, the notice does not specify under

which limb of section 271(1)(c) the penalty proceedings had been initiated i.e.

whether for concealment of income or for furnishing of inaccurate particulars of

income. Therefore, the penalty proceedings become bad in law. We, therefore,

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set-aside the order of the ld. CIT(A) and direct the Assessing Officer to cancel

the penalty so levied. The appeal filed by the assessee is accordingly allowed.

Order pronounced in the open Court at the time of hearing itself i.e. on this 09th August, 2018.

Sd/- Sd/- (SUCHITRA KAMBLE) (R. K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER Dated: 09-08-2018. Sujeet Copy of order to: - 1) The Appellant 2) The Respondent 3) The CIT 4) The CIT(A) 5) The DR, I.T.A.T., Raipur. By Order //True Copy// Sr. Private Secretary ITAT, Raipur