Appeal Granted: Penalty Cancelled Due to Defective Notice

The Tribunal allowed the appeal, canceling the penalty imposed under section 271(1)(c) by the AO, citing a defective show cause notice lacking specific charges, in line with judicial pronouncements.

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Issues:
Challenge to penalty proceedings initiation due to defective show cause notice.

Analysis:
The appeal was against the confirmation of a penalty imposed by the Assessing Officer (AO) under section 271(1)(c) of the Income Tax Act, 1961. The AO had added a sum to the total income of the assessee on account of short term capital gain from the sale of shares, and subsequently initiated penalty proceedings. The penalty was confirmed by the Ld. CIT(A), leading to the appeal before the Tribunal. During the appeal hearing, the department was absent, and the assessee's counsel raised a preliminary issue regarding the initiation of penalty proceedings. The counsel argued that the show cause notice issued by the AO did not contain a specific charge, making it defective. The counsel cited a decision of the Hon'ble Kolkata High Court in a similar case, where it was held that a notice under section 271(1)(c) without specifying the contravention was defective. The High Court relied on previous decisions to support this conclusion. The Tribunal found that the issue raised by the assessee was covered by the judicial pronouncements cited and, therefore, canceled the penalty imposed by the AO.

In conclusion, the Tribunal allowed the appeal of the assessee, canceling the penalty imposed under section 271(1)(c) by the AO and confirmed by the Ld. CIT(A). The decision was based on the defect in the show cause notice, following the judicial pronouncements referenced during the hearing. The Tribunal's decision was in line with the legal precedent established by the Hon'ble Kolkata High Court and other relevant cases.

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