RANJAN DEBNATH,KOLKATA vs. ITO, WD-26(1), KOLKATA, KOLKATA

The ld.AR submits that the issue raised in the appeal is covered by the decision of the Hon’ble Supreme Court in the case of SSA’s Emerald Meadows. He also submits that the AO imposed penalty on defective notice issued u/s. 274 r.w.s 271(1) ( c) of the Act on 30- 12-2010 and in view of the decision supra the imposition of penalty is not maintainable.

The ld.AR of the assessee further submits that the statutory notice dt. 30-12-2010 issued by the AO [ ITO, War-53(1), Kolkata ] u/s. 274 r.w.s 271 of the Act is defective. He further argued that the issue in hand as raised by the assessee is squarely covered in favour of assessee by the decision of the Hon’ble Supreme Court in the case of SSA’s Emerald Meadows. In support of this contention, he placed reliance on the decision of the Hon’ble Karnataka High Court in the 1 case of CIT vs SSA’S Emerald Meadows supra in ITA No. 380 of 2015 dated 23.11.2015 which was later approved by the Hon’ble Supreme Court by dismissal of Special Leave Petition (SLP) filed by the Revenue in CC No. 11485/2016 dated 5.8.2016. In response to this, the ld DR vehemently relied on the order of the ld AO.

We have heard the rival submissions. We find that the notice dt. 30-12-2010 issued u/s 274 r.w.s 271 of the Act does not specify the charge of offence committed by the assessee viz whether had concealed the particulars of income or had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. This issue has been decided by the Hon’ble Karnataka High Court in the case of CIT vs SSA’S Emerald Meadows in of 2015 dated 23.11.2015 which in turn placed reliance on another judgment of the same court in the case of CIT vs Manjunatha Cotton and Ginning Factory reported in 359 ITR 565 (Kar). In the said decision, their Lordships of Hon’ble Karnataka High Court held that :- 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 reported in (2013) 359 ITR 565. 4. In our view, since the matter is covered by judgement 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.

We find that the Revenue had preferred a SLP before the Hon’ble Supreme Court against this judgment which was dismissed in CC No. 11485/2016 dated 5.8.2016 by observing as under:- UPON hearing the counsel, the Court made the following ORDER Delay condoned. We do not find any merit in this petition. The special leave petition is , accordingly dismissed. Pending application, if any, stands disposed of.

Respectfully following the aforesaid judicial precedents, we cancel the penalty levied of Rs. Rs.1,70,766/- by the AO U/Sec.271 (1) ( c) of the Act and confirmed by the CIT-A. Accordingly, the grounds raised by the assessee in the appeal for the A.Y under consideration are allowed.

In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 05-10-2017