SHRI SHAMBHU NATH DAS,PURBA MEDINIPUR vs. ACIT, CIRCLE-HALDIA, HALDIA

The appeal filed by the assessee is against the order of Ld. CIT(A)-7, Kolkata dated 30.12.2014 for AY 2007-08.

At the outset itself, we find that the Ld. CIT(A) dismissed the assessee’s appeal as not maintainable by observing that the assessee presented the appeal 371 days beyond the date of limitation specified in sub-section 2 of section 249 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”), without any sufficient cause, therefore, the delay in filing the appeal was not condoned. However, at the time of hearing, the Ld. Counsel for the assessee drew our attention to the notices u/s. 274 of the Act r.w.s. 271 of the Act dated 29.12.2010 and 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 2 Shri Shambhu Nath Das., AY 2007-08 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 29.12.2010 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 which has been erroneously confirmed by the ld. CIT(A). Therefore, the appeal of the assessee is allowed.

In the result, the appeal of assessee is allowed.