BAIDYA NATH DEY,BURDWAN V. ITO, WARD 1(3), DURGAPUR

ITA 337/KOL/2025

AI Insights

The case involves an appeal by Baidya Nath Dey against the order of the National Faceless Appeal Centre, Delhi, which confirmed a penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961. The penalty was based on an assessment that determined the income of the assessee for the assessment year 2011-12. The primary contention was the validity of the penalty notice issued under section 274 read with section 271(1)(c), which was argued to be invalid due to the mechanical issuance of the notice without proper indication of the relevant or irrelevant limbs.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 712883 (ITAT-KOLKATA)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-07-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Assessment Year: 2011-2012
• Other Referred Cases: KPC Medical College and Hospital v. PCIT [2025] 173 taxmann.com 581 (Cal HC)
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANOJ KUMAR PATI
• Assessee Lawyers: SHUVO CHACKRBORTY
• Keywords: Invalid notice
• Section: 143(3); 271(1)(c)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, KOLKATA BEFORE SHRI RAJESH KUMAR, AM AND SHRI PRADIP KUMAR CHOUBEY, JM ITA No.337/KOL/2025 (Assessment Year: 2011-12) Baidya Nath Dey Station More, P.O. Ukhra Burdwan-713363, West Bengal Vs. ITO, Ward 1(3), Durgapur, Aaykar Bhavan, Aykar Bithi, City Centre, Durgapur, West Bengal-713216 (Appellant) (Respondent) PAN No. AHPPD0247E Assessee by : Shri Shuvo Chackrborty, AR Revenue by : Shri Manoj Kumar Pati, DR Date of hearing: 17.07.2025 Date of pronouncement: 29.07.2025 O R D E R Per Rajesh Kumar, AM: This is an appeal preferred by the assessee against the order of the National Faceless Appeal Centre, Delhi (hereinafter referred to as the “Ld. CIT(A)”] dated 16.01.2025 for the AY 2011-12. 02. The only issue pressed by the assessee is against the confirmation of penalty by the ld. CIT (A) as imposed by the ld. AO u/s 271(1)(c) of the Act, on the basis of invalid notice issued u/s 274 read with section 271(1)(c) of the Act. 03. The facts in brief are that the assessment u/s 143(3) of the Income- tax Act, 1961 (the Act) dated 14.12.2018, was framed assessing the income of ₹18,51,630/-. The ld. AO issued notice u/s 274 read with section 271(1)(c) of the Act dated 14.12.2018 initiating the penalty Printed from counselvise.com Page | 2 ITA No.337/KOL/2025 Baidya Nath Dey; A.Y. 2011-12 proceedings. Finally, the ld. AO imposed the penalty u/s 271(1)(c) of the Act, being 100% of the tax to be evaded amounting to ₹7,38,000/-, which was affirmed by the ld. CIT (A). 04. Now, the assessee has challenged the order of ld. CIT (A) on the ground that since the penalty order was passed in consequence to invalid notice u/s 271(1)(c) of the Act, therefore, all the consequential proceedings/ order are invalid and may be quashed. The ld. AR referred to the notice issued u/s 274 read with section 271(1)(c) of the Act dated 14.12.2018 and submitted that the ld. AO has not struck off the irrelevant limb nor indicated the relevant limb in the penalty notice and therefore, notice itself is issued without application of mind and in standard format which rendered the said notice to be invalid in the eyes of the law. Consequently, the penalty order passed u/s 271(1)(c) of the Act is also invalid and deserves to be quashed. 05. The ld. DR heavily relied on the orders of the ld. lower authorities. 06. After hearing the rival contentions and perusing the materials available on record, we find from the perusal of the notice that the ld. AO has not struck off the irrelevant limb of the notice nor indicated the relevant limb. Therefore, the notice has been issued in a mechanical manner and without application of mind which is invalid and goes to the root of the matter. Consequently, the order passed by the ld. AO u/s 271(1)(c) of the Act is also invalid and cannot be sustained. The case of the assessee is squarely covered by the decision of Hon'ble Kolkata High Court decision in the case of KPC Medical College and Hospital v. PCIT [2025] 173 taxmann.com 581 (Cal HC), wherein the Hon'ble court has held that where in the penalty notice issued u/s 274 read with section 271 of the Act none of the relevant columns have been indicated nor the irrelevant limb been Printed from counselvise.com Page | 3 ITA No.337/KOL/2025 Baidya Nath Dey; A.Y. 2011-12 struck off. In other words, the then show cause notice issued u/s 274 read with section 271(1)(c) of the Act did not specify the charge against the assessee as to whether it was for concealment of income or furnishing of inaccurate particulars of income. Consequently, we are inclined to quash the penalty order passed by the ld. AO u/s 271(1)(c) of the Act being based on the invalid notice issued u/s 271(1)(c) of the Act. 07. In the result, the appeal of the assessee is allowed. Order pronounced in the open court on 29.07.2025. Sd/- Sd/- (PRADIP KUMAR CHOUBEY) (RAJESH KUMAR) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) Kolkata, Dated: 29.07.2025 Sudip Sarkar, Sr.PS Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT 4. DR, ITAT, 5. Guard file. BY ORDER, True Copy// Sr. Private Secretary/ Asst. Registrar Income Tax Appellate Tribunal, Kolkata Printed from counselvise.com "