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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri M.Balaganesh & Shri S.S. Viswanethra Ravi
ORDER Shri S.S.Viswanethra Ravi, JM:
This appeal by Assessee is arising out of order dated 21-08-2014 of CIT(A), Central-II, Kolkata for the assessment year 2009-10, wherein he confirmed the penalty of Rs.11,04,686/- imposed by the AO u/s. 271(1)( c) of the Act.
The brief facts of the issue are that the a search and seizure operation us/ 132 of the Act was conducted on 08-12-2009 and subsequent dates in the case of Shashi Kant Khetan Group, in which undisclosed bank account no. 33105147097 with Standard Chartered Bank was found and by alleging the said bank account belonged to assessee the AO assessed the total income at Rs.39,12,550/- u/s. 153C/143(3) by treating the credits in the said bank account of Rs.37,00,000/- as ‘Unexplained cash credit’.
3. The CIT(A) dismissed the appeal of assessee by confirming the said addition as made by the AO. Thereafter, the AO initiated penalty 1 Madan Kumar Jha proceedings by issuing a notice dt. 17-10-2011 u/s. 274 r.w.s 271(1) ( c) of the Act imposed penalty of Rs.11,04,686/- as the assessee did not disclose the said amount voluntarily. This action of the AO in imposing the impugned penalty was confirmed by the said order of the CIT(A).
The ld AR apart from reiterating the facts also brought to the notice of the Bench that the penalty notice issued u/s 274 read with section 271(1)(c ) of the Act had not struck off the relevant portion by specifically mentioning the charge of offence committed by the assessee viz., whether it had concealed the particulars of income or it had furnished inaccurate particulars of income. Accordingly he stated the show cause notice for penalty proceedings was defective and in support of this, he placed reliance on 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 which was later approved by the Hon’ble Supreme Court by dismissal of Special Leave Petition (SLP) 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 penalty notice dt. 17-10-2011 u/s 274 r.w.s 271(1)(c ) of the Act does not specify the charge of offence committed by the assessee viz whether it had concealed the particulars of income or it had furnished inaccurate particulars of income. Hence the said notice is to be held as defective. Now the short question that arises for consideration is as to whether the penalty could be validly levied based on the defective show cause notice. This issue has been addressed 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 :- 2 ITA No. 1998/Kol/2014 Madan Kumar Jha
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.
5.1. 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.
5.2. Respectfully following the aforesaid judicial precedents, we cancel the levy of penalty in the facts and circumstances of the case. Accordingly the grounds raised by the assessee are allowed.
In the result, the appeal of the assessee is allowed. . Order pronounced in the open court on 05-04-2017
Sd/- Sd/- M.Balaganesh S.S. Viswanethra Ravi Accountant Member Judicial Member
Dated :05-04-2017 PP(Sr.P.S.)
Copy of the order forwarded to:
Appellant – Shri Madan Kumar Jha C/o Chhaparia & Associates, Chartered Accountants, 8 Camac Street, Shantiniketan Building, 5th Floor, Room No.2, Kolkata-17. 2 Respondent – The DCIT, CC-XIII, Kolkata/CIT(A), Central-II, Aaykar Bhawan Purva, 8th floor, 110 Shanti pally, E M Bye Pass, Kolkata-107. 3. The CIT(A), Kolkata 4. CIT , Kolkata 5. DR, Kolkata Benches, Kolkata