Penalty under Section 271(1)(c) deleted for defective notice

The Appellate Tribunal ITAT Kolkata upheld the Commissioner's decision to delete the penalty under Section 271(1)(c) due to a defective notice lacking specification of the penalty imposition limb. The Tribunal dismissed the revenue's appeal, affirming the deletion of the penalty based on legal precedents and the substantive defect in the penalty notice.

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Issues:
1. Appeal against deletion of penalty under Section 271(1)(c) of the Income Tax Act, 1961.

Analysis:
The Appellate Tribunal ITAT Kolkata heard an appeal by the revenue against the Commissioner of Income Tax(Appeals)-3, Kolkata's order for the assessment year 2010-11. The sole issue raised was the deletion of a penalty of Rs. 70,55,520/- imposed under Section 271(1)(c) by the Assessing Officer. The revenue contended that the penalty deletion was due to a defective notice under Section 274 that did not specify the limb for penalty imposition.

The Tribunal noted a discrepancy in the appeal filing date but proceeded to hear the appeal on merit. It referenced decisions of Jurisdictional High Courts supporting the assessee's position. The penalty proceedings were initiated based on a notice dated 13.08.2015, where the penalty was imposed for undisclosed income. The Commissioner deleted the penalty citing a substantive defect in the notice, which did not specify the limb for penalty imposition, relying on relevant case laws.

After reviewing the facts and arguments, the Tribunal found the penalty notice was issued mechanically without specifying the limb for penalty imposition, rendering it impermissible under the Act. Non-mentioning of the relevant limb in the notice was deemed a substantive defect, not curable. The Tribunal upheld the Commissioner's order based on precedents cited, including decisions of the Jurisdictional High Court. Consequently, the revenue's appeal was dismissed, affirming the deletion of the penalty.

In conclusion, the Appellate Tribunal ITAT Kolkata upheld the decision of the Commissioner to delete the penalty under Section 271(1)(c) due to a defective notice lacking specification of the penalty imposition limb. The Tribunal's ruling was supported by legal precedents, leading to the dismissal of the revenue's appeal.

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