ACIT, CIR-29, KOLKATA, KOLKATA vs. SHREE GOPAL CHOUDHARY, KOLKATA

This is an appeal filed by the revenue against the order of Ld. CIT(A)-8, Kolkata dated 11.05.2015 for AY 2007-08 deleting the penalty imposed by the AO u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

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 30.04.2014 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 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)

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.”

We note that since the penalty notice issued to the assessee dated 30.04.2014 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 cancel the penalty imposed by the AO. We also find that the Ld. CIT(A) has rightly deleted the penalty by observing that provisions of sec. 271(1)(c) of the Act is attracted if the assessee conceals income or furnishes inaccurate particulars of income. According to him, no such instance has been found in this case. He therefore deleted the penalty by following the various judicial decisions cited in his order. Therefore, we affirm the view of the Ld. CIT(A) on the aforesaid view of the Hon’ble High Courts cited supra also and, therefore, appeal of the revenue is dismissed.