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.
The Bombay High Court, considering the Tribunal’s findings and the legal position concerning the defective penalty notices, concluded that the Appeals did not involve any substantial question of law and therefore did not merit admission. Consequently, the Appeals were dismissed.
Cases Discussed
- CIT vs. SSA’s Emerald Meadows — Karnataka High Court decision concerning the requirement to specify the applicable limb of Section 271(1)(c) in a notice under Section 274, followed by dismissal of the Revenue’s SLP by the Supreme Court.
FULL TEXT OF THE JUDGMENT/ORDER OF BOMBAY HIGH COURT
These Income Tax Appeals challenge a Judgment and Order of the Income Tax Appellate Tribunal, Panaji Bench, which is a common order passed in three connected appeals.
2. The subject matter of Appeals concerns penalty levied by the Assessing Officer on the ground that the Assessees had not filed returns within the due date. The Assessees were claimed to have filed returns after a search was conducted in their premises under Section 132 of the Income Tax Act. The Department’s case was that but for such search, the income now offered to tax by the Assessees would not have been so offered. The Tribunal has correctly observed in its impugned order that the penalty notices in these cases were not issued for any specific charge, that is to say, for concealment of particulars of income or furnishing of inaccurate particulars. When the matter was before the CIT (A), he referred to the decision of Karnataka High Court in the case of CIT vs. SSA’s Emerald Meadows (ITA No.380 of 2015 dated 23.11.2015). The Court had held that no notice could be issued under Section 274, read with Section 271(1)(c) of the Income Tax Act, without indicating which particular limb of Section 271(1)(c) was invoked for initiating the penalty proceedings. The Court took the view that the matter was covered by an earlier decision of a Division Bench of that Court and did not involve any substantial question of law. The matter, thereafter, went in an SLP before the Supreme Court, who did not find any merit in the petition. The Tribunal also noticed that the jurisdictional High Court in the case of 392 ITR 4 had also taken the same view.
3. The Appeals, accordingly, do not involve any substantial question of law and do not merit admission.
The Appeals are, accordingly, dismissed.
