POPULAR MEGA MOTORS (INDIA) PRIVATE LIMITED,KOCHI V. DCIT, CORPORATE CIR 2(1), KOCHI

ITA 273/COCH/2025

AI Insights

The case involves Popular Mega Motors (India) Private Limited appealing against a penalty imposed by the Deputy Commissioner of Income-tax, Cir. 2(1) Kochi, for the assessment year 2013-2014. The penalty was levied under section 271(1)(c) of the Income-tax Act, which pertains to penalties for concealment of income or furnishing inaccurate particulars of income. The appellant contested the vagueness of the penalty notice, which did not clearly specify the grounds for the penalty. The tribunal, referencing a similar case and a High Court decision, found the notice to be defective and quashed the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 397259 (ITAT-COCHIN)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Other Referred Cases: PCIT v. Shri Ambady Krishna Menon, Riyas Nelliyote in ITA No.767/Coch/2024
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL; SENIOR
• Assessee Lawyers: P.M.VEERAMANI
• Section: 271(1)(c)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH, COCHIN Before Shri Inturi Rama Rao, Accountant Member & Shri Prakash Chand Yadav, Judicial Member ITA No.273/Coch/2025 : Asst.Year 2013-2014 Popular Mega Motors (India) Private Limited Kuttukkaran Centre, Mamangalam Ernakulam – 682 025. PAN : AABCP6105H. v. The Dy.Commissioner of Income-tax, Cir. 2(1) Kochi. (Appellant) (Respondent) Appellant by : Sri.P.M.Veeramani, CA Respondent by : Smt.Leena Lal, Senior AR Date of Hearing : 27.05.2025. Date of Pronouncement : 30.05.2025 O R D E R Per Prakash Chand Yadav, JM : The present appeal of the assessee is arising from the order of the National Faceless Appeal Centre / learned Commissioner of Income-tax (Appeals [“CIT(A)” for short] dated 17th March, 2025, and relates to assessment year 2013-2014. 2. At the outset, we find that the solitary issue involved is regarding levy of penalty u/s.271(1)(c) of the Income-tax Act. The learned Counsel for the assessee drawn the attention of the bench towards page 46 of the paper book, which the copy of the notice issued by the Assessing Officer before initiating penalty proceedings. It is the contention of the learned Counsel for the assessee that the notice issued by the AO was a vague ITA No.273/Coch/2025. Popular Mega Motors (India) Private Limited. 2 notice, in as much as; the AO has not specified the charge against the assessee. 3. The learned DR relied upon the orders of the authorities below. 4. We have heard the rival submissions and perused the material available on record. We observe that similar issue has been decided by the co-ordinate bench in the case of Riyas Nelliyote in ITA No.767/Coch/2024 (order dated 8th April, 2025), wherein the co-ordinate bench has observed as under:- “8. We have heard rival submissions and perused the material available on record. Copy of the assessment order dated 09.10.2018 passed u/s.143(3) r.w.s. 147 of the Act is placed on record. On perusal of the same, it is seen that it has merely mentioned that penalty proceedings have been initiated separately. A copy of the notice issued u/s.274 of the Act for is also placed on record. On perusal of the notice, we find it is defective and the same has not specified the particular ground on which the AO has proceeded against the assessee for imposing of penalty, viz., whether it is for “concealment of income”, “furnishing inaccurate particulars of income” or for both. The Hon’ble jurisdictional High Court in the case of PCIT v. Shri Ambady Krishna Menon (supra) had held as follows:- “11. We also find merit in the finding of the Appellate Tribunal in Annexure 'I' order that the notice proposing penalty, that was issued to the respondent/assessee, was inherently defective, in that, it had not specified the particular ground on which the Revenue was proceeding against the assessee for the imposition of the penalty. Thus, in any view of the matter, we find that the imposition of penalty under Section 271(1)(c) of the I.T. Act on the respondent/assessee for the assessment year 2011-12 cannot be legally sustained.” 9. In the instant case, it is an undisputed fact that the assessment order and the notice issued u/s.274 is vague and is not clear under which limb the penalty has been initiated. Therefore, in the light of the judgment of the Hon’ble ITA No.273/Coch/2025. Popular Mega Motors (India) Private Limited. 3 jurisdictional High Court in the case of PCIT v. Shri Ambady Krishna Menon (supra), we hold that the notice issued u/s.274 is bad in law and consequentially the order imposing penalty u/s.271(1)(c) of the Act arising therefrom is unsustainable and we quash the same. It is ordered accordingly.” 5. Respectfully following the verdict of the co-ordinate bench, we allow this appeal of the assessee on the legal ground itself and the penalty levied by the AO is quashed. 6. In the result, the appeal filed by the assessee is allowed. Order pronounced on this 30th day of May, 2025. Sd/- (Inturi Rama Rao) Sd/- (Prakash Chand Yadav) ACCOUNTANT MEMBER JUDICIAL MEMBER Cochin; Dated : 30th May, 2025. Devadas G* Copy to : 1. The Appellant. 2. The Respondent. 3. The CIT, Cochin. 4. The DR, ITAT, Cochin. 5. Guard File. Asst.Registrar/ITAT, Cochin "