2019 (4) TMI 1502 - HC - Income Tax

Penalty u/s 271(1)(c) r.w.s. 274 - defective notice - exact nature of contravention for which the assessee was liable under the provisions - HELD THAT - We are also shown a Division Bench judgment of our Court in Pr. CIT Versus Dr. Murari Mohan Koley, 2018 (9) TMI 1 - CALCUTTA HIGH COURT .It came to the conclusion that unless the charge against the assessee was specific, the same could not be maintained. Applying this ratio, the Tribunal, in our opinion, has correctly deleted the penalty of for the self same reason that no details of any charge were provided to the assessee in the impugned notice. For this technical reason, the order of the Tribunal has to be upheld. We admit the appeal before us and dismiss the same. We have only gone into the question of technical defect in the notice stated to have been issued under Section 271(1)(c) read with Section 274 and the consequences thereof.

Summary

Issues:
1. Condonation of delay in preferring the appeal.
2. Interpretation of Section 260A of the Income Tax Act, 1961.
3. Importance of specifying charges in a notice under Section 271(1)(c) read with Section 274 of the Income Tax Act, 1961.

Analysis:
1. The judgment addresses the issue of delay in preferring the appeal. The Court, comprising of I. P. Mukerji and MD. Nizamuddin, JJ., allowed the application for condonation of delay of 161 days in preferring the appeal. The appeal was directed to be registered by the department immediately, indicating that sufficient cause was shown for the delay.

2. The judgment delves into the interpretation of Section 260A of the Income Tax Act, 1961, citing the Supreme Court judgment in Amrit Foods Versus Commissioner of Central Excise, U.P. The Court emphasized the importance of specifying charges in a notice to the assessee, as highlighted in the referred paragraph from the Supreme Court judgment. Additionally, a Division Bench judgment of the Calcutta High Court was mentioned, emphasizing the necessity of specific charges against the assessee for maintaining penalties. The Tribunal's decision to delete a penalty due to lack of specific charge details in the notice was upheld by the Court.

3. The judgment specifically focuses on the technical defect in the notice issued under Section 271(1)(c) read with Section 274 of the Income Tax Act, 1961. The Court clarified that they only examined the issue of the technical defect in the notice and its consequences, without delving into any other matters. Ultimately, the appeal under ITAT 8 of 2019, along with the connected stay application (GA 189 of 2019), was dismissed based on the technical grounds related to the notice's lack of specificity regarding charges against the assessee.