Mr.Arun Kumar Bhalotia, L/h of Smt. Aruna 0510308Bhalotia (since deceased), Kolkata V. I.T.O.,Ward-10(1), Kolkata

ITA 24/KOL/2020

AI Insights

The case involves Mr. Arun Kumar Bhalotia, the legal heir of the deceased Smt. Aruna Bhalotia, who appealed against the penalty imposed by the Income Tax Officer, Ward-10(1), Kolkata, which was confirmed by the CIT(Appeals)-4, Kolkata. The penalty of Rs.3,47,337 was imposed for alleged concealment of income or furnishing inaccurate particulars under section 271(1)(c) of the Income Tax Act for the Assessment Year 2014-2015. The primary contention in the appeal was the defect in the show-cause notice, which failed to specify the exact nature of the charge. The Tribunal, referencing several judgments from the Hon'ble Calcutta High Court, concluded that such a defect rendered the penalty proceedings void ab initio, leading to the allowance of the appeal and deletion of the penalty.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129059 (ITAT-KOLKATA)
• Duration Of Justice: 2 year(s) 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-01-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: C
• Next Hearing Date: 04-01-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 06-01-2020
• Other Referred Cases: Sundaram Finance Limited \/ CIT, CIT \/ Yachio Engineering Co. Limited, PCIT \/ Bijoy Kumar Agarwal, PCIT \/ Dr. Murari Mohan Koley, Neerja Saraf \/ ITO, Vijayshree Autocom Limited \/ DCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271(1)(c); 274

Judgement Text

ITA No. 24/KOL/2020 Assessment Year: 2014-2015 Arun Kumar Bhalotia 1 IN THE INCOME TAX APPELLATE TRIBUNAL, ‘C’ BENCH, KOLKATA Before Shri Rajpal Yadav, Vice-President (KZ) & Shri Rajesh Kumar, Accountant Member I.T.A. No. 24/KOL/2020 Assessment Year: 2014-2015 Mr. Arun Kumar Bhalotia,.....................Appellant Legal Heir of Smt. Aruna Bhalotia (since deceased), 113/1B, Hazra Road, Kolkata-700026 [PAN: AEEPB3012R] -Vs.- Income Tax Officer,...............................Respondent Ward-10(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 Appearances by: Shri Amit Agarwal, A.R., appeared on behalf of the assessee Shri Vijay Kumar, Addl. CIT, appeared on behalf of the Revenue Date of concluding the hearing : January 05, 2023 Date of pronouncing the order : January 05, 2023 O R D E R Per Rajpal Yadav, Vice-President (KZ):- The assessee is in appeal before the Tribunal against the order of ld. Commissioner of Income Tax (Appeals)-4, Kolkata dated 22.10.2019 passed for A.Y. 2014-15. ITA No. 24/KOL/2020 Assessment Year: 2014-2015 Arun Kumar Bhalotia 2 2. The solitary grievance of the assessee is that the ld. CIT(Appeals) has erred in confirming the penalty of Rs.3,47,337/-, which was imposed by the ld. Assessing Officer under section 271(1)(c) of the Income Tax Act. 3. The ld. Counsel for the assesese, at the very outset, submitted that there is a defect in the show-cause notice, which has been recognized by the ld. 1 s t Appellate Authority also in the finding recorded in paragraphs no. 3 & 4. However, ld. CIT(Appeals) has ignored the decision of the Hon’ble Jurisdictional High Court even after taking cognizance of them and preferred to rely upon the decision of the Hon’ble Madras High Court. 4. On the other hand, ld. D.R. relied upon the orders of Revenue Authorities below. 5. We have duly considered the rival contentions and gone through the record carefully. There is no dispute with regard to the fact that in the show-cause notice issued under section 274 of the Income Tax Act inviting explanation of the assessee as to why penalty unde r section 271(1)(c) be not imposed upon him. The ld. Assessing Officer has not specifie d the charge i.e. whether it is being issued for furnishing inaccurate particulars or for concealing the particulars of income. The ld. CIT(Appeals) in its finding has admitted that defect is there. He also took note of the judgment of the ITA No. 24/KOL/2020 Assessment Year: 2014-2015 Arun Kumar Bhalotia 3 Hon’ble Calcutta High Court but thereafter he gave preference to the decision of the Hon’ble Madras High Court in the case of Sundaram Finance Limited –vs.- CIT reported in 353 ITR 375. 6. On the other hand, the following decisions of - (i) CIT –vs.- Yachio Engineering Co. Limited- ITAT No. 21/2020, ord3er dated 04.03.2022 (Calcutta HC); (ii) PCIT –vs.- Bijoy Kumar Agarwal- ITAT No.272 of 2017, Order dated 22.04.2019 (Calcutta HC); (iii) PCIT –vs.- Dr. Murari Mohan Koley- ITAT No. 306 of 2017, Order daed 18.07.2018 (Calcutta HC); (iv) Neerja Saraf –vs.- ITO- ITA No. 692/KOL/2019, Order dated 14.06.2019 (Kol. ITAT); (v) Vijayshree Autocom Limited –vs.- DCIT- ITA Nos. 2374-2375/KOL/2018, order dated 28.03.2022 (Kol. ITAT), Hon’ble High Court as well as ITAT has held that if charges are not specified in the show-cause notice, then penalty proceeding would be void ab initio and no penalty would be imposable upon the assessee. 7. On due conside ration of the above facts, we are of the view that the ld. 1 s t Appellate Authority ought to have followed the Hon’ble Jurisdictional High Court. Thus ld. 1 s t Appellate Authority has committed an error by ITA No. 24/KOL/2020 Assessment Year: 2014-2015 Arun Kumar Bhalotia 4 following the non-jurisdictional High Court decision on the point. After going through all these details, we are of the view that penalty is not sustainable. We allow the appeal of the assessee and delete the penalty. 8. In the result, the appeal of the assessee is allowed. Order pronounced in the open Court on 5 t h January, 2023. Sd/- Sd/- (Rajesh Kumar) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 5 th day of January, 2023 Copies to :(1) Arun Kumar Bhalotia, Legal Heir of Smt. Aruna Bhalotia (since deceased), 113/1B, Hazra Road, Kolkata-700026 (2) Income Tax Officer, Ward-10(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax (Appeals)-4, Kolkata; 4) Commissioner of Income Tax- ; (5) The Departmental Representative (6) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.