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Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA
Before: Shri N.V.Vasudevan & Shri Waseem Ahmed
आदेश /O R D E R
PER Waseem Ahmed, Accountant Member:-
This appeal by the Revenue is directed against the order of Commissioner of Income Tax (Appeals)-III, Kolkata dated 04.06.2014. Penalty levied by DCIT, Central Circle-XXV, Kolkata u/s 271(1)(c) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his order dated 25.07.2013 for assessment year 2010-11. Shri Sallong Yaden, Ld. Departmental Representative represented on behalf of Revenue and Shri A.K. Tibrewal, Ld. Authorized Representative appeared on behalf of assessee.
A.Y. 2010-11 DCIT Cir-8, Kol. Vs. M/s Ambo Exports Ltd. Page 2 2. In this appeal the Revenue has challenged the order of ld. CIT(A) whereby the CIT(A) deleted the penalty imposed by the Assessing Officer on the assessee u/s 271(1)(c) of the Act.
The facts and circumstances under which penalty u/s 271(1)(c) of the Act was levied on the assessee by the AO are as follows :- The Assessee is a limited company. It is engaged in the business of manufacturing of Tea and Coffee. The business premise of the assessee was covered under survey operation under section 133A of the Act dated 23-07-2009. The assessee filed return of income for A.Y. 2008-09 declaring total income of Rs.5,98,92,283/-. During the course of assessment proceedings various undisclosed income inter alia u/s 69A and 69C of the Act were unearthed amounting to Rs.46,14,892/-. In respect of the aforesaid addition made in the course of assessment proceedings the AO initiated penalty proceedings u/s 271(1)(c) of the Act. The AO imposed penalty holding that the assessee has violated the provision of law enumerated in Section 271(1)(c) of the Act and Ld. CIT(A) reversed the penalty order imposed by AO. Hence this appeal by the Revenue is filed before the Tribunal.
The ld. DR relied on the order of AO whereas the ld. Counsel for the assessee submitted before us that the show cause notice issued u/s 274 of the Act before imposing penalty does not contain the specific charge against the assessee namely as to whether the assessee was guilty of having concealed particulars of income or having furnished inaccurate particulars of income. A copy of the show cause notice u/s 274 of the Act is placed on record in the file. Perusal of the notice reveals that AO has not struck out the irrelevant portion in the show cause notice and therefore the show cause notice does not specify the charge against the assessee as to whether the charge is of concealment of particulars of income or furnishing of inaccurate particulars of income. Ld. AR for the assessee filed a indeed of case laws which are kept with the record.
The ld. Counsel for the assessee drew our attention to the decision of the Hon’ble Karnataka High Court in the case of CIT vs. SSA’s Emerald Meadows in of 2015 dated 23.11.2015 wherein the Hon’ble Karnataka High Court following its own decision in the case of CIT vs Manjunatha Cotton and Ginning Factory (2013) 359 ITR 565 (Kar) took a view that imposing of penalty u/s 271(1)(c) of the Act is bad in law and invalid for the reason that the show cause notice u/s 274 of the Act does not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The ld. Counsel further brought to our notice that as against the decision of the Hon’ble Karnataka High Court the revenue preferred an appeal in SLP in CC No.11485 of 2016 and the Hon’ble Supreme Court by its order dated 05.08.2016 dismissed the SLP preferred by the Department. The ld. Counsel also brought to our notice the decision of the Hon’ble Bombay High Court in the case of CIT vs Shri Samson Perinchery in ITA No.1154 of 2014 dated 05.01.2017 wherein the Hon’ble Bombay High Court following the decision of the Hon’ble Karnataka High Court in the case of Manjunatha Cotton and Ginning Factory (supra) came to the conclusion that imposition of penalty on defective show cause notice without specifying the charge against the assessee cannot be sustained. Our attention was also drawn to the decision of ITAT in the case of Suvaprasanna Bhattacharya vs ACIT in ITA No.1303/Kol/2010 dated 06.11.2015 wherein identical proposition has been followed by the Tribunal.