ARINDAM MUKHERJI,KOLKATA V. I.T.O., WARD - 31(2), KOLKATA, KOLKATA

ITA 1384/KOL/2024

AI Insights

The case involves appeals by Arindam Mukherji against the penalty imposed by the AO for the assessment years 2011-2012 and 2012-2013, which was confirmed by the CIT(A). The penalty was related to the addition of capital gains income that was allegedly understated by the assessee. The Tribunal examined the validity of the penalty notice and the specific charges under which the penalty was imposed. It was found that the notice did not clearly specify the charges, leading to the conclusion that the penalty was not legally sustainable.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126776 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Assessment Year: 2011-2012
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: H. ROBINDRO SINGH
• Assessee Lawyers: I. BANERJEE
• Keywords: Set aside; Tax effect; Initiation of penalty proceedings; Grounds of appeal; Satisfaction; National Faceless Appeal; Judgment; HRA; Commissioner

Judgement Text

" आयकर अपीलीय अधिकरण, “सी” न्यायपीठ, कोलकाता IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, ACCOUNTANT MEMBER AND SHRI SONJOY SARMA, JUDICIAL MEMBER आयकर अपील सं/ITA No.1384&1385/KOL/2024 (नििाारण वर्ा / Assessment Year : 2011-2012 & 2012-2013) Arindam Mukherji, 79/1, Serpentine Lane, West Bengal-700014 Vs ITO, Ward-31(2), Kolkata PAN No. :AEVPM 3352 G (अपीलार्थी /Appellant) .. (प्रत्यर्थी / Respondent) नििााररती की ओर से /Assessee by : Shri I. Banerjee, AR राजस्व की ओर से /Revenue by : Shri H.Robindro Singh, Addl.CIT-Sr. DR सुनवाई की तारीख / Date of Hearing : 06/02/2025 घोषणा की तारीख/Date of Pronouncement : 25/04/2025 आदेश / O R D E R Per Rajesh Kumar, AM : These are the two appeals filed by the assessee against the order both dated 24.04.2024 passed by the ld. CIT(A), National Faceless Appeal Centre (NFAC), Delhi, for the assessment year 2011-2012 & 2012-2013. 2. In both the appeals, the assessee has raised the similar grounds of appeal. Therefore, for the sake of convenience, we shall take into the grounds of appeal and facts mentioned in ITA No.1384/Kol/2024 filed for A.Y.2011-2012 for consideration and outcome of the same shall also be applicable to the appeal filed by the assessee in ITA No.1385/Kol/2024 for A.Y.2012-2013 as well. 3. The assessee has raised the following grounds in ITA No.1384/Kol/2024 filed for A.Y.2011-2012 :- ITA No.1384&1385/KOL/2024 2 1. That on the facts and circumstances of the case and in law, the Appellate Order passed by the Ld. Commissioner (Appeals)-NFAC, New Delhi, for being founded on superficial, arbitrary, fallacious view and judgment, is liable to be cancelled, reversed and declared unsustainable. (Tax Effect: Penalty of Rs.344463.00) 2. That on the facts and circumstances of the case and in law, the Ld. Commissioner (Appeals) - NFAC, New Delhi, was not justified in confirming the imposition of Penalty of Rs.344463.00, u/s 271(1)(c), in respect of addition of Rs.1672154.00 under the head \"Capital Gain\", as the same addition had been just in consequence of the Appellate Order, for preceding AY of 2010-11, whereby the taxability thereof in the current year had been adjudicated. (Tax Effect: Penalty of Rs.344463.00) 3. The Ld. Commissioner-Appeals (NFAC) while upholding the imposition of Penalty in respect of addition of Rs.1672154.00 ought to have appreciated the plea of the Appellant, that due to nullification of the same addition, effected in relation to in the prior Assessment Year, vide the Appellate Order, passed for such year, the Appellate decision as to taxability thereof in the current assessment year, rather than in prior year, the allegation of furnishing of inaccurate particulars could never be imputed to the Appellant. (Tax Effect: Penalty of Rs.344463.00) 4. That on the facts and circumstances of the case and in law, the Ld. Commissioner (Appeals) - NFAC, ought to have appreciated that mere non filing of Appeal against some income assessed, based on legal interpretation of law, does not, ipso facto and necessarily call for imputation of furnishing of \"inaccurate particulars\", unless some mala fide and evasive endeavour at the end of the Assessee/Appellant is evident. 5. Without prejudice to Ground No. 2, 3 and 4 above, the levy of Penalty under sec.271(1)(c) is not maintainable, as in the Penalty Notice, issued u/s 274, the allegation against the Appellant had been kept vague, open and indeterminate, due to not striking off the irrelevant portion, and in this regard, the judgment relied on by the Ld. Commissioner (Appeals)- NFAC, is fully distinguishable. 6. That the Appellant craves leave to go for additional grounds, modify / not press any one or more of the aforesaid grounds, either before or during the Appeal Hearing. ITA No.1384&1385/KOL/2024 3 4. The only issue raised in this appeal is against confirming the penalty of Rs.3,44,463/- by the ld. CIT(A), which was levied by the AO u/s.271(1)(c) of the Act. 5. Facts in brief are that the assessment u/s.143(3) of the Act was made vide order dated 16.02.2016. During the course of assessment proceedings the AO noticed that the assessee has sold 2200 sq.ft. area for a consideration of Rs.45 lakhs in the assessment year 2008-2009 on which the capital gain was computed at Rs.43,76,198/-. The AO noted that since the capital gain shown by the assessee was at Rs.27,04,044/- and, therefore, balance amount of Rs.16,72,154/- remained to be added to the total income of the assessee and accordingly penalty proceedings u/s.271(1)(c) of the Act were initiated vide notice issued u/s.271(1)(c) r.w.s.274 of the Act dated 05.02.2016. However, while issuing notice, the AO specified that the assessee had concealed the particular of income or furnished inaccurate particulars of income and in the assessment order also there was no satisfaction recorded by the AO except mentioning that initiation of penalty proceedings u/s.271(1)(c) of the Act. In appeal the order of penalty was confirmed. 6. After hearing the rival contentions and perusing the material on record, we find that the said notice issued by the AO is without specifying the charge on which the penalty was proposed to be levied, particularly, when there is no satisfaction in the assessment order on which charge the penalty proceedings were initiated. In that scenario, the penalty notice issued u/s.271(1)(c) r.w.s.274 of the Act itself is bad in law, so also the ITA No.1384&1385/KOL/2024 4 consequential proceedings including the penalty order. Accordingly, we set aside the order of the ld. CIT(A) for both the years under consideration and direct the AO to delete the penalty levied in both the appeals. 8. In the result, both appeals of the assessee are allowed. Order pronounced in the open court on 25/04/2025. Sd/- ( SONJOY SARMA) Sd/- (RAJESH KUMAR) न्यानयक सदस्य / JUDICIAL MEMBER लेखा सदस्य/ ACCOUNTANT MEMBER कोलकाता Kolkata; ददनाांक Dated 25/04/2025 Prakash Kumar Mishra, Sr.P.S. आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : आदेशािुसार/ BY ORDER, (Assistant Registrar) Income Tax Appellate Tribunal, Kolkata 1. अपीलार्थी / The Appellant- 2. प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), 4. आयकर आयुक्त / CIT 5. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, ITAT, Kolkata 6. गार्ड फाईल / Guard file. सत्यापपत प्रतत //True Copy// "