PCIT Vs New Era Sova Mine (Bombay High Court)
These Income Tax Appeals challenged a common Judgment and Order of the Income Tax Appellate Tribunal, Panaji Bench, passed in three connected appeals concerning penalties levied by the Assessing Officer on the ground that the Assessees had not filed their returns within the due date. The Assessees were stated to have filed returns after a search was conducted at their premises under Section 132 of the Income Tax Act. The Department’s case was that, but for the search, the income subsequently offered to tax would not have been offered by the Assessees.
The Tribunal observed that the penalty notices issued in the cases did not specify the particular charge for which penalty proceedings were initiated, namely concealment of particulars of income or furnishing of inaccurate particulars. Before the Commissioner (Appeals), reliance was placed on the Karnataka High Court’s decision in CIT v. SSA’s Emerald Meadows, ITA No. 380 of 2015 dated 23.11.2015. The Karnataka High Court had held that a notice under Section 274 read with Section 271(1)(c) could not be issued without indicating which particular limb of Section 271(1)(c) was invoked for initiating penalty proceedings.
The Karnataka High Court considered the issue to be covered by an earlier Division Bench decision and held that no substantial question of law arose. The matter subsequently reached the Supreme Court by way of an SLP, but the Supreme Court found no merit in the petition and dismissed it. The Tribunal also noticed that the jurisdictional Bombay High Court had taken the same view in the decision reported at 392 ITR 4.
