TaxTMI 
TaxTMI 
2026 (7) TMI 1386
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.... 2. At the outset of hearing, Learned Authorized Representative (Ld. AR) pressed only Ground No. 2, which is against the order of Ld. CIT(A) for not considering the fact that notice issued u/s 274 r.w.s. 271(1)(c) of the Act, dated 03.12.2018 by ACIT, Circle - 12(1), Kolkata failed to mention the nature of default in the penalty order. Therefore, the notice issued u/s 271(1)(c)/274 of the Act and also consequent penalty order passed by the AO are bad in law and may be quashed. 3. The facts in brief are that the assessee filed the return of income for A.Y. 2016-17, declaring total income of Rs. 2,00,77,120/-. The assessment u/s 143(3) of the Act was framed on 03.12.2018 at an assessed income of Rs. 2,15,13,180/-. The penalty proceedings ....
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....s also placed in the paper book. The Ld. AR, therefore, prayed that since the assessment has been framed by ACIT, Circle - 12(1), Kolkata sans notice u/s 143(2) of the Act, therefore, the assessment framed is invalid and nullity in the eyes of law and therefore, the penalty proceeding cannot be validly initiated and imposed based on the same. So far as the issue of invalidity of assessment being raised in the correlate proceeding, i.e., in the present case, penalty proceedings challenging invalidity of the assessment order, the Ld. AR submitted that assessee is within his legitimate right to challenge the jurisdiction in the appellate proceeding and therefore, the penalty initiated and imposed is bad in law and may be quashed. The ld. AR in....
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.... and imposed is also invalid in the eyes of law. So far as the argument of the Ld. AR of the assessee qua the issue being raised in the collateral proceeding regarding the validity of assessment order are concerned, the same is squarely covered by a series of decisions namely Keshab Narayan Banerjee Vs. CIT [1999] 238 ITR 694 (Calcutta)/[1999] 156 CTR 109 (Calcutta) and M/s Classic Flour & Food Processing Pvt. Ltd. Vs. CIT, Kolkata in ITA no. 764 to 766/KOL/2024 vide order dated 05.04.2017, Concord Infra Projects Pvt. Ld. Vs. PCIT in ITA No. 174/KOL/2021 vide order dated 13.10.2024. 8. Considering the facts of the present case in the light of the above decisions, we incline to hold that penalty imposed is invalid and is hereby deleted. ....
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....rayed that penalty notice as well as penalty order may be quashed as the same are invalid, nullity and bad in the eyes of law. 10. Per Contra, the Ld. CIT-DR submitted that the mere non mentioning of one of the two charges in the notice should not result in quashing the notice or the order passed u/s 271(1)(c) of the Act. The Ld. CIT-DR prayed that if at all any defect is there, the same may directed to be cured by referred to the matter to AO for issuing correct notice and passing the penalty order accordingly. 11. After hearing the rival contentions of the parties and perused the materials available on record including the penalty notice, we find that undisputedly the notice has been issued by the AO u/s 274/271(1)(c) of the Act dat....
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.... Court of Karnataka following the decision in CIT v. Manjunatha Cotton & Ginning Factory [2013] 35 taxmann.com 250/218 Taxman 423/359 ITR 565 (Kar.) held that the imposition of penalty under section 271(1)(c) of the Act is bad in law and invalid for the reasons where the show cause notice under section 274 of the Act did not specify the charge against the assessee as to whether it is for concealment of particulars of income or furnishing of inaccurate particulars of income. The said decision of the High Court of Karnataka was affirmed by the Hon'ble Supreme Court in the decision reported in CIT v. SSA's Emerald Meadows [2016] 73 taxmann.com 248/242 Taxman 180. On the same lines it is the decision of this court in Pr. CIT v. Brijendr....