MD. SHAMSAD ALAM,KOLKATA vs. ITO, WARD-53(1), KOLKATA, KOLKATA

The captioned appeal filed by the Assessee, pertaining to the assessment year 2009-2010, is directed against the order passed by the ld. Commissioner of Income Tax (Appeals)-XXXIII, Kolkata, in Appeal No.49/CIT(A)-XXXIII/ITO Ward53(1)/Kol/12-13, dated 17.09.2014, which in turn arises out of an order passed by the Assessing Officer u/s.143(3) of the Income Tax Act 1961, (hereinafter referred to as the ‘Act’), dated 27/12/2011.

Brief facts of the case qua the assessee are that the assessee filed his return of income for the assessment year 2009-10 on 30.09.2009 disclosing total income of Rs.1,93,600/-. The return of assessee was processed u/s.143(1) of the I.T. Act. Later on, the assessee’s case was selected under scrutiny u/s.143(3) of the Act and the AO completed the assessment by making addition of Rs.1,30,125/- on account of depreciation on Tanker, Rs.1,33,737/-on account of discrepancies in Loan & Advances, Rs.2,87,105/-on account of interest paid for Tanker purchase, Rs.1,23,876/-on account of Tanker hire charges, and Rs.51,650/- on account of car maintenance. While making the assessment, the AO observed that assessee has claimed Car maintenance expenses whereas there was no motor car in the asset side of the Balance Sheet of the assessee. The AO also observed some bogus expenses claimed by the assessee therefore, the AO levied the penalty U/s 271(1) (c ) of the Act.

Not being satisfied with the penalty order passed by the AO, the assessee filed an appeal before the ld CIT(A), who has confirmed the penalty imposed by AO under section 271(1) (c) of the Act. The ld CIT(A) observed that assessee was not guilty of furnishing any inaccurate particulars of income on concealing income in so far as the additions on account of discrepancy of Rs.1,33,737/- in the loan amount, interest of Rs.2,87,105/- not debited to the profit and loss account and addition of Rs. 1,30,161/- on account of expenditure treated as revenue expenditure by the Assessing Officer are concerned. Therefore ld CIT(A) directed the AO to delete the penalty U/s 271(1) (c ) of the Act, in respect of these additions. However, the ld CIT(A) confirmed the penalty in respect of additions of Rs.1,23,876/- on account of understatement of Tanker hire charges and Rs. 51,650 on account of bogus claim of Car maintenance expenses.

Not being satisfied with the order of ld. CIT(A), the assessee is in further appeal before us and has taken the following grounds of appeal :-

Ld. DR for the Revenue has primarily relied on the findings of the AO, which we have already noted in our earlier para and is not being repeated for the sake of brevity.

Having heard the submissions of ld AR for the assessee and perused the material available on records, we are of the view that notice issued by the AO under section 271(1) (c ) of the Act is defective. The notice under section 271 (1) (c ) of the Act, should specifically state as to whether penalty is being imposed for concealment of income or for furnishing inaccurate particulars of income. There is no any specific charge on the assessee in the case under consideration therefore the penalty imposed by the AO and confirmed by the ld CIT(A) needs to be deleted. Accordingly, we delete the penalty.

In the result, the appeal filed by the assessee, is allowed.