Non mention of specific ground in penalty notice U/s. 274 makes it defective

Both appeal by the Revenue are directed against the common orders of Commissioner (Appeals) Central-I, Kolkata dated 5-3-2013. Assessments were framed by DCIT, Central Circle-VII Kolkata under section 153C/143(3) of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) vide his orders dated 24-12-2010 for assessment years 2006-07 and 2007-08 respectively. Penalty levied by assessing officer under section 271(1)(c)/274 of the Act vide his orders dated 27-12-2011 respectively.

2. Except figure the issues are same in both the appeals therefore we are taking the facts of the case for assessment year 2006-07 as a lead case for the sake of convenience, we pass a consolidated order for both the appeals. Grounds raised by Revenue per its appeal are reproduced below:-

“1. The Commissioner (Appeals), Central-I, Kolkata has erred in deleting the penalty under section 271(1)(c) imposed upon the assessee to the tune of Rs. 36,86,345 by the assessing officer.

2. On the facts and circumstances of the case and also in law, the Commissioner (Appeals) has erred in deleting the penalty on the presumption that Explanation 5A to section 271(1)(c) does not apply to assessment completed under section 153C of the Income Tax Act.

3. On the facts and circumstances of the case and also in law, the Commissioner (Appeals) is perverse in as much as it fails to take into account the express provisions of section 153C(1) of the Income Tax Act.

4. On the facts and circumstances of the case and also in law, the Commissioner (Appeals) has erred in not appreciating the position of law that assessment under section 153C is made in accordance with the provision of section 153A and hence the Explanation 5A to section 271(1)(c) squarely apply to the assessment completed under section 153C.

5. On the facts and circumstances of the case and also in law, the Commissioner (Appeals) has erred in deciding that there is no concealment as because there was no difference between the income returned under section 153C and income assessed under section 153C, whereas the Explanation 5A to section 271(1)(c) has clarified that if the income has not been declared in the original return filed under section 139 then the income declared in the return under section 153C shall be deemed to have been concealed.”

3. Inter-connected issue in grounds No. 1 to 5 are that learned Commissioner (Appeals) erred in deleting the penalty levied by assessing officer as per Explanation 5A to section 271(1)(c) of the Act.