VIDYA FINVEST LTD.,KOLKATA vs. DCIT, CIR-5, KOLKATA, KOLKATA

PDF · subscribers
ITA 680/KOL/2015Status: DisposedITAT Kolkata16 August 2017AY 2007-20083 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty notice was bad in law as it failed to specify the limb of Section 271(1)(c) under which the penalty proceedings were initiated. Following the Karnataka High Court's decisions, the Tribunal cancelled the penalty.

What were the facts?

The assessee appealed against a penalty imposed under Section 271(1)(c) of the Income-tax Act. The penalty notice issued by the Assessing Officer did not clearly specify whether it was for concealment of income or furnishing inaccurate particulars of income.

What were the issues?

Whether a penalty under Section 271(1)(c) is valid if the notice issued under Section 274 does not clearly specify the default (concealment or inaccurate particulars).

Which sections of the Income-tax Act were involved?

Section 271(1)(c),Section 274

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(3)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “B” BENCH: KOLKATA

Hearing: 09.08.2017Pronounced: 16.08.2017

ORDER

Per Shri A.T.Varkey, JM

1.

This is an appeal filed by the assessee against the order of Ld. CIT(A)-2, Kolkata dated 16.02.2015 for AY 2007-08 confirming the penalty of Rs.3,52,195/- u/s. 271(1)(c) of the Income-tax Act, 1961 (hereinafter referred to as the “Act”).

2.

None appeared on behalf of the revenue at the time of hearing but a consolidated application consists of fourteen cases seeking adjournment for hearing is placed on record, which we have rejected and after hearing the Ld. AR and considering the material available on record, we dispose of this appeal of assessee ex parte qua the revenue. 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 31.12.2009 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 Vidya Finvest Ltd., AY 2007-08 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).

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.”

We also find that the aforesaid order of the Hon’ble High Court was challenged by the department before the Hon’ble Supreme Court by preferring an SLP which has been dismissed which fact has been reported in CIT Vs. SSA’s Emerald Meadows (2016) 73 taxmann.com 248 (SC).

4.

We note that since the penalty notice issued to the assessee dated 31.12.2009 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, appeal of the assessee is allowed.

5.

In the result, appeal of assessee is allowed.

More judgments on Section 271(1)(c)

All 25,141 judgments and leading authorities on Section 271(1)(c) →

Recent GST High Court judgments

Search GST case law →