M/S MURLIDHAR RATANLAL EXPORTS,KOLKATA vs. DCIT, CIR-1, KOLKATA, KOLKATA

This is an appeal filed by the assessee against the order of Ld. CIT(A)-1, Kolkata dated 14.09.2015 for AY 2010-11 confirming the penalty imposed by the AO u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

The appeal of assessee is time barred by 67 days and condonation of delay petition along with supporting affidavit has been filed and is placed on record. Since there is reasonable cause for the delay in filing appeal, we condone the delay and admit the appeal for hearing 3. At the outset itself, the Ld. Counsel for the assessee drew our attention to the notice u/s. 274 of the act r.w.s. 271 of the Act dated 29.03.2013 served on the assessee wherein we note that the AO has not struck down the limb of charge/default for which the penalty is being initiated against the assessee. We find that the notice has been issued for “having concealed the particulars of income” or “furnished inaccurate particulars of such income”. We note that in a similar case, the Hon’ble High court of Karnataka in the case of CIT vs Manjunatha Cotton and Ginning Factory reported in (2013) 359 ITR 565 (Kar) has cancelled the penalty taking note of the fact that the penalty notice did not spell out clearly 2 Murlidhar Ratanlal Exports Ltd.., AY 2010-11 as to whether the assessee has concealed the particulars of income or has furnished inaccurate particulars of Income. We also find that Hon’ble Karnataka High Court in the case of CIT Vs. SSA’s Emerald Meadows, reported in (2016) 73 taxmann.com 241 (Kar) endorsed the same view in Manjunatha Cotton and Ginning Factory (supra) and held 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 CIT Vs. Manjunatha Cotton & Ginning Factory (2013) 359 ITR 565/218 Taxman 423/35 taxmann.com 250(Kar).

We note that since the penalty notice issued to the assessee dated 29.03.2013 did not spell out as to which default the assessee has committed for which penalty u/s. 271(1)(c) of the Act has been initiated, therefore, respectfully following the Hon’ble Karnataka High Court’s order in Manjunatha Cotton & Ginning Factory (supra) and SSA’s Emerald Meadows (supra), we set aside the order of Ld. CIT(A) and delete the penalty imposed by the AO and confirmed by the Ld. CIT(A) u/s. 271(1)(c) of the Act. Therefore, the appeal of the assessee is allowed.

In the result, appeal of assessee is allowed.