Suruchi Vihar Pvt. Ltd., Kolkata V. ACIT, Cent. Circle-2(3), Kolkata, Kolkata

CO 35/KOL/2017

• Counselvise Citation: [2018] 123 COUNSELVISE.COM (IT) 3719 (ITAT-KOLKATA)
• Duration Of Justice: 11 month(s) 12 day(s)
• Appeal Type: Cross Objection
• Pronouncement Date: 20-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2013-2014
• Appeal Filed On: 08-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: G HANGSHING
• Assessee Lawyers: A K TIBREWAL
• Keywords: Search and seizure; Opportunity of being heard; Principle of natural justice; Question of law
• Section: 143(3); 69

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SRI A. T. VARKEY, JM & DR. ARJUN LAL SAINI, AM] I.T.A NO.233/KOL/2017 ASSESSMENT YEAR : 2013-14 ACIT, CENTRAL CIRCLE-2(3), -VS.- M/S. SURUCHI VIHAR PVT. LTD. KOLKATA [PAN : AAGCS 6819 N] (REVENUE) (ASSESSEE) & CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 M/S. SURUCHI VIHAR PVT. LTD. -VS.- ACIT, CENTRAL CIRCLE-2(3), KOLKATA [PAN : AAGCS 6819 N] (ASSESSEE) (REVENUE) FOR THE ASSESSEE : SHRI A. K. TIBREWAL, FCA FOR THE REVENUE : SHRI G. HANGSHING, CIT(DR ) DATE OF HEARING : 16.04.2018. DATE OF PRONOUNCEMENT : 20.04.2018. ORDER PER A. L. SAINI, AM: THE CAPTIONED APPEAL FILED BY THE REVENUE, CROSS-OBJECTIONS(CO) FILED BY THE ASSESSEE PERTAINING TO ASSESSMENT YEAR 2013-14, ARE DIRECTED AGAINST ORDER PASSED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-20, KOLKATA IN APPEAL NO.1137/CIT(A)-20/CC-2(3)/15-16, DATED 09.11.2016, WHICH IN TURN ARISES OUT OF A PENALTY ORDER PASSED BY THE ASSESSING OFFICER U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) DATED 30.09.2015. 2. IN THIS APPEAL THE REVENUE HAS CHALLENGED THE ORDER OF CIT(A) WHEREBY THE CIT(A) QUASHED THE ORDER OF AO IMPOSING PENALTY ON THE ASSESSEE U/S 271(1)(C) OF THE INCOME TAX ACT, 1961 (ACT). M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 2 3. THE FACTS AND CIRCUMSTANCES UNDER WHICH PENALTY U/S 271(1)(C) OF THE ACT WAS IMPOSED ON THE ASSESSEE BY THE AO ARE AS FOLLOWS :- A SEARCH AND SEIZURE OPERATION WAS CONDUCTED IN RESPECT OF AGARWAL GOURISARIA SUB-GROUND OF CASES ON 13.02.2013 AND ON SUBSEQUENT DATES. M/S VIBHAVARI FASHION PVT. LTD. IS ONE OF THE ASSESSEES OF THIS GROUP. THE ASSESSEE FILED HER RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 30.09.2013 DECLARING A TOTAL INCOME OF RS.2,62,31,210/-. ASSESSMENT U/S 143(3) OF THE ACT, WAS COMPLETED ON 31.03.2015 AT RS.2,62,51,080/-. IN THE COURSE OF ASSESSMENT PROCEEDINGS, IT WAS NOTED BY THE ASSESSING OFFICER THAT THE ASSESSEE HAS MADE DISCLOSURE OF RS.2,00,00,000/- U/S 132(4) OF THE ACT, AND WAS TREATED AS UNDISCLOSED INCOME OF THE ASSESSEE FOR THE PREVIOUS YEAR 2012-13 AND THUS PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ACT, HAD BEEN INITIATED. IT WAS OBSERVED BY THE AO, THAT THE ASSESSEE DISCLOSED ADDITIONAL INCOME OF RS.2,00,00,000/- IN THE RETURN FILED U/S 153A(A)(1). THE ADDITIONAL INCOME OF RS.2,00,00,000/- WAS DISCLOSED AFTER SEARCH WAS COMPLETED AND EVEN AFTER DUE DATE OF FILING RETURN. THE ADDITIONAL DISCLOSED INCOME WAS A RESULT OF SEARCH OPERATION WHICH HAD CAUSED THE ASSESSEE TO DISCLOSE SUPPRESSED INCOME WHICH QUALIFIES THE APPLICATION OF SECTION 271(1)(C). THEREFORE, THE AO NOTED THAT THE ASSESSEE HAS FAILED TO DISCLOSE HIS FULL AND TRUE INCOME IN THE RETURN FILED U/S 139(1) OF THE ACT, AND THEREFORE, THE AO TREATED RS. 2,00,00,000/-, AS CONCEALED INCOME OF THE ASSESSEE. THEREFORE, PENALTY U/S 271(1)(C) OF THE ACT, ON SUCH SUPPRESSED INCOME OF RS.2,00,00,000/- WAS IMPOSED BY AO TO THE TUNE OF RS.65,85,580/-. 4. AT THE OUTSET ITSELF, THE LD. COUNSEL FOR THE ASSESSEE HAS POINTED OUT THAT NOTICE ISSUED BY THE AO, U/S 271 (1) (C ) OF THE ACT IS DEFECTIVE AND THIS ISSUE IS SQUARELY COVERED BY THE JUDGMENT OF THE COORDINATE BENCH, KOLKATA, IN THE CASE OF JEETMAL CHORARIA VS. M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 3 ACIT, CIRCLE-43, KOLKATA I.T.A NO.956/KOL/2016 ASSESSMENT YEAR 2010-11, WHEREIN IT WAS HELD AS FOLLOWS: 5. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED BEFORE US THAT THE SHOW CAUSE NOTICE ISSUED U/S 274 OF THE ACT BEFORE IMPOSING PENALTY DOES NOT CONTAIN THE SPECIFIC CHARGE AGAINST THE ASSESSEE NAMELY AS TO WHETHER THE ASSESSEE WAS GUILTY OF HAVING CONCEALED PARTICULARS OF INCOME OR HAVING FURNISHED INACCURATE PARTICULARS OF INCOME. A COPY OF THE SHOW CAUSE NOTICE U/S 274 OF THE ACT WAS FILED BEFORE US AND PERUSAL OF THE SAME REVEALS THAT AO HAS NOT STRUCK OUT THE IRRELEVANT PORTION IN THE SHOW CAUSE NOTICE AND THEREFORE THE SHOW CAUSE NOTICE DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER THE CHARGE IS OF CONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE SAME IS REPRODUCED FOR THE PURPOSE OF READY REFERENCE: HAVE CONCEALED THE PARTICULARS OF YOUR INCOME OR FURNISHED INACCURATE PARTICULARS OF SUCH INCOME. 6. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTENTION TO THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS. SSAS EMERALD MEADOWS IN ITA NO.380 OF 2015 DATED 23.11.2015 WHEREIN THE HONBLE KARNATAKA HIGH COURT FOLLOWING ITS OWN DECISION IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (2013) 359 ITR 565 TOOK A VIEW THAT IMPOSING OF PENALTY U/S 271(1)(C) OF THE ACT IS BAD IN LAW AND INVALID FOR THE REASON THAT THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES 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 LD. COUNSEL FURTHER BROUGHT TO OUR NOTICE THAT AS AGAINST THE DECISION OF THE HONBLE KARNATAKA HIGH COURT THE REVENUE PREFERRED AN APPEAL IN SLP IN CC NO.11485 OF 2016 AND THE HONBLE SUPREME COURT BY ITS ORDER DATED 05.08.2016 DISMISSED THE SLP PREFERRED BY THE DEPARTMENT. THE LD. COUNSEL ALSO BROUGHT TO OUR NOTICE THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS SHRI SAMSON PERINCHERY IN ITA NO.1154 OF 2014 DATED 05.01.2017 WHEREIN THE HONBLE BOMBAY HIGH COURT FOLLOWING THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF CIT VS MANJUNATHA COTTON AND GINNING FACTORY (SUPRA) CAME TO THE CONCLUSION THAT IMPOSITION OF PENALTY ON DEFECTIVE SHOW CAUSE NOTICE WITHOUT SPECIFYING THE CHARGE AGAINST THE ASSESSEE CANNOT BE SUSTAINED. OUR ATTENTION WAS ALSO DRAWN TO THE DECISION OF ITAT IN THE CASE OF SUVAPRASANNA BHATTACHARYA VS ACIT IN ITA NO.1303/KOL/2010 DATED 06.11.2015 WHEREIN IDENTICAL PROPOSITION HAS BEEN FOLLOWED BY THE TRIBUNAL. 7. THE LEARNED DR SUBMITTED THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF DR.SYAMAL BARAN MONDAL VS. CIT (2011) 244 CTR 631 (CAL) HAS TAKEN A VIEW THAT SEC.271 DOES NOT MANDATE THAT THE RECORDING OF SATISFACTION ABOUT CONCEALMENT OF INCOME MUST BE IN SPECIFIC TERMS AND WORDS AND THAT SATISFACTION OF AO MUST REFLECT FROM THE ORDER EITHER WITH EXPRESSED WORDS RECORDED BY THE AO OR BY HIS OVERT ACT AND ACTION. IN OUR VIEW THIS DECISION IS ON THE QUESTION OF RECORDING SATISFACTION AND NOT IN THE CONTEXT OF SPECIFIC CHARGE IN THE MANDATORY SHOW CAUSE NOTICE U/S.274 OF THE ACT. THEREFORE REFERENCE TO THIS DECISION, IN OUR VIEW IS NOT OF ANY HELP TO THE PLEA OF THE REVENUE BEFORE US. 8. THE LEARNED DR RELIED ON THREE DECISIONS OF MUMBAI ITAT VIZ., (I) DHANRAJ MILLS PVT. LTD. VS. ACIT ITA NO.3830 & 3833/MUM/2009 DATED 21.3.2017; (II) EARTHMOVING EQUIPMENT SERVICE CORPORATION VS. DCIT 22(2), MUMBAI, (2017) 84 TAXMANN.COM 51 (III) MAHESH M.GANDHI VS. ACIT VS. ACIT ITA NO.2976/MUM/2016 DATED 27.2.2017. RELIANCE WAS PLACED ON TWO DECISIONS OF THE HONBLE BOMBAY HIGH COURT VIZ., (I) CIT VS. KAUSHALYA 216 ITR 660(BOM) AND (II) M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017. THIS DECISION M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 4 WAS REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR. THIS IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED. HOWEVER A GIST OF THE RATIO LAID DOWN IN THE DECISION HAS BEEN GIVEN IN THE WRITTEN NOTE FILED BEFORE US. 9. IN THE CASE OF CIT VS. KAUSHALYA (SUPRA), THE HONBLE BOMBAY HIGH COURT HELD THAT SECTION 274 OR ANY OTHER PROVISION IN THE ACT OR THE RULES, DOES NOT EITHER MANDATE THE GIVING OF NOTICE OR ITS ISSUANCE IN A PARTICULAR FORM. PENALTY PROCEEDINGS ARE QUASI-CRIMINAL IN NATURE. SECTION 274 CONTAINS THE PRINCIPLE OF NATURAL JUSTICE OF THE ASSESSEE BEING HEARD BEFORE LEVYING PENALTY. RULES OF NATURAL JUSTICE CANNOT BE IMPRISONED IN ANY STRAIGHT-JACKET FORMULA. FOR SUSTAINING A COMPLAINT OF FAILURE OF THE PRINCIPLES OF NATURAL JUSTICE ON THE GROUND OF ABSENCE OF OPPORTUNITY, IT HAS TO BE ESTABLISHED THAT PREJUDICE IS CAUSED TO THE CONCERNED PERSON BY THE PROCEDURE FOLLOWED. THE ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON- STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE ITAT MUMBAI BENCH IN THE CASE OF DHANRAJ MILLS PVT.LTD. (SUPRA) FOLLOWED THE DECISION RENDERED BY THE JURISDICTIONAL HONBLE BOMBAY HIGH COURT IN THE CASE OF KAUSHALYA (SUPRA) AND CHOSE NOT TO FOLLOW DECISION OF HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA). RELIANCE WAS ALSO PLACED BY THE ITAT MUMBAI IN THIS DECISION ON THE DECISION OF HONBLE PATNA HIGH COURT IN THE CASE OF CIT V. MITHILA MOTOR 'S (P.) LTD. [1984] 149 ITR 751 (PATNA) WHEREIN IT WAS HELD THAT UNDER SECTION 274 OF THE INCOME-TAX ACT, 1961, ALL THAT IS REQUIRED IS THAT THE ASSESSEE SHOULD BE GIVEN AN OPPORTUNITY TO SHOW CAUSE. NO STATUTORY NOTICE HAS BEEN PRESCRIBED IN THIS BEHALF. HENCE, IT IS SUFFICIENT IF THE ASSESSEE WAS AWARE OF THE CHARGES HE HAD TO MEET AND WAS GIVEN AN OPPORTUNITY OF BEING HEARD. A MISTAKE IN THE NOTICE WOULD NOT INVALIDATE PENALTY PROCEEDINGS. 10. IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA), THE ITAT MUMBAI DID NOT FOLLOW THE DECISION RENDERED IN THE CASE OF MANJUNATHA COTTON & GINNING FACTORY (SUPRA) FOR THE REASON THAT PENALTY IN THAT CASE WAS DELETED FOR SO MANY REASONS AND NOT SOLELY ON THE BASIS OF DEFECT IN SHOW CAUSE NOTICE U/S.274 OF THE ACT. THIS IS NOT FACTUALLY CORRECT. ONE OF THE PARTIES BEFORE THE GROUP OF ASSESSEES BEFORE THE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) WAS AN ASSESSEE BY NAME M/S.VEERABHADRAPPA SANGAPPA & CO., IN ITA NO.5020 OF 2009 WHICH WAS AN APPEAL BY THE REVENUE. THE TRIBUNAL HELD THAT ON PERUSAL OF THE NOTICE ISSUED UNDER SECTION 271(1)(C) OF THE ACT, IT IS CLEAR THAT IT IS A STANDARD PROFORMA USED BY THE ASSESSING AUTHORITY. BEFORE ISSUING THE NOTICE THE INAPPROPRIATE WORDS AND PARAGRAPHS WERE NEITHER STRUCK OFF NOR DELETED. THE ASSESSING AUTHORITY WAS NOT SURE AS TO WHETHER SHE HAD PROCEEDED ON THE BASIS THAT THE ASSESSEE HAD EITHER CONCEALED ITS INCOME OR HAS FURNISHED INACCURATE DETAILS. THE NOTICE IS NOT IN COMPLIANCE WITH THE REQUIREMENT OF THE PARTICULAR SECTION AND THEREFORE IT IS A VAGUE NOTICE, WHICH IS ATTRIBUTABLE TO A PATENT NON APPLICATION OF MIND ON THE PART OF THE ASSESSING AUTHORITY. FURTHER, IT HELD THAT THE ASSESSING OFFICER HAD MADE ADDITIONS UNDER SECTION 69 OF THE ACT BEING UNDISCLOSED INVESTMENT. IN THE APPEAL, THE SAID FINDING WAS SET-ASIDE. BUT ADDITION WAS SUSTAINED ON A NEW GROUND, THAT IS UNDER VALUATION OF CLOSING STOCK. SINCE THE ASSESSING AUTHORITY HAD INITIATED PENALTY PROCEEDINGS BASED ON THE ADDITIONS MADE UNDER SECTION 69 OF THE ACT, WHICH WAS STRUCK DOWN BY THE APPELLATE AUTHORITY, THE INITIATED PENAL PROCEEDINGS, NO LONGER EXISTS. IF THE APPELLATE AUTHORITY HAD INITIATED PENAL PROCEEDINGS ON THE BASIS OF THE ADDITION SUSTAINED UNDER A NEW GROUND IT HAS A LEGAL SANCTUM. THIS WAS NOT SO IN THIS CASE AND THEREFORE, ON BOTH THE GROUNDS THE IMPUGNED ORDER PASSED BY THE APPELLATE AUTHORITY AS WELL AS THE ASSESSING AUTHORITY WAS SET-ASIDE BY ITS ORDER DATED 9TH APRIL, 2009. AGGRIEVED BY THE SAID ORDER, THE REVENUE FILED APPEAL BEFORE HIGH COURT. THE HONBLE HIGH COURT FRAMED THE FOLLOWING QUESTION OF LAW IN THE SAID APPEAL VIZ., 1. WHETHER THE NOTICE ISSUED UNDER SECTION 271(1)(C) IN THE PRINTED FORM WITHOUT SPECIFICALLY MENTIONING WHETHER THE PROCEEDINGS ARE INITIATED ON THE GROUND OF CONCEALMENT OF INCOME OR ON ACCOUNT OF FURNISHING M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 5 OF INACCURATE PARTICULARS IS VALID AND LEGAL? 2. WHETHER THE PROCEEDINGS INITIATED BY THE ASSESSING AUTHORITY WAS LEGAL AND VALID? THE HONBLE KARNATAKA HIGH COURT HELD IN THE NEGATIVE AND AGAINST THE REVENUE ON BOTH THE QUESTIONS. THEREFORE THE DECISION RENDERED BY THE ITAT MUMBAI IN THE CASE OF EARTHMOVING EQUIPMENT SERVICE CORPORATION (SUPRA) IS OF NO ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. 11. IN THE CASE OF M/S.MAHARAJ GARAGE & CO. VS. CIT DATED 22.8.2017 REFERRED TO IN THE WRITTEN NOTE GIVEN BY THE LEARNED DR, WHICH IS AN UNREPORTED DECISION AND A COPY OF THE SAME WAS NOT FURNISHED, THE SAME PROPOSITION AS WAS LAID DOWN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA) APPEARS TO HAVE BEEN REITERATED, AS IS EVIDENT FROM THE EXTRACTS FURNISHED IN THE WRITTEN NOTE FURNISHED BY THE LEARNED DR BEFORE US. 12. IN THE CASE OF TRISHUL ENTERPRISES ITA NO.384 & 385/MUM/2014, THE MUMBAI BENCH OF ITAT FOLLOWED THE DECISION OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA (SUPRA). 13. IN THE CASE OF MAHESH M.GANDHI (SUPRA) THE MUMBAI ITAT THE ITAT HELD THAT THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE MANJUNATHA COTTON & GINNING (SUPRA) WILL NOT BE APPLICABLE TO THE FACTS OF THAT CASE BECAUSE THE AO IN THE ASSESSMENT ORDER WHILE INITIATING PENALTY PROCEEDINGS HAS HELD THAT THE ASSESSEE HAD CONCEALED PARTICULARS OF INCOME AND MERELY BECAUSE IN THE SHOW CAUSE NOTICE U/S.274 OF THE ACT, THERE IS NO MENTION WHETHER THE PROCEEDINGS ARE FOR FURNISHING INACCURATE PARTICULARS OR CONCEALING PARTICULARS OF INCOME, THAT WILL NOT VITIATE THE PENALTY PROCEEDINGS. IN THE PRESENT CASE THERE IS NO WHISPHER IN THE ORDER OF ASSESSMENT ON THIS ASPECT. WE HAVE POINTED OUT THIS ASPECT IN THE EARLIER PART OF THIS ORDER. HENCE, THIS DECISION WILL NOT BE OF ANY ASSISTANCE TO THE PLEA OF THE REVENUE BEFORE US. EVEN OTHERWISE THIS DECISION DOES NOT FOLLOW THE RATIO LAID DOWN BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) IN AS MUCH AS THE RATIO LAID DOWN IN THE SAID CASE WAS ONLY WITH REFERENCE TO SHOW CAUSE NOTICE U/S.274 OF THE ACT. THE HONBLE COURT DID NOT LAY DOWN A PROPOSITION THAT THE DEFECT IN THE SHOW CAUSE NOTICE WILL STAND CURED IF THE INTENTION OF THE CHARGE U/S.271(1) (C ) IS DISCERNIBLE FROM A READING OF THE ASSESSMENT ORDER IN WHICH THE PENALTY WAS INITIATED. 14. FROM THE AFORESAID DISCUSSION IT CAN BE SEEN THAT THE LINE OF REASONING OF THE HONBLE BOMBAY HIGH COURT AND THE HONBLE PATNA HIGH COURT IS THAT ISSUANCE OF NOTICE IS AN ADMINISTRATIVE DEVICE FOR INFORMING THE ASSESSEE ABOUT THE PROPOSAL TO LEVY PENALTY IN ORDER TO ENABLE HIM TO EXPLAIN AS TO WHY IT SHOULD NOT BE DONE. MERE MISTAKE IN THE LANGUAGE USED OR MERE NON-STRIKING OF THE INACCURATE PORTION CANNOT BY ITSELF INVALIDATE THE NOTICE. THE TRIBUNAL BENCHES AT MUMBAI AND PATNA BEING SUBORDINATE TO THE HONBLE BOMBAY HIGH COURT AND PATNA HIGH COURT ARE BOUND TO FOLLOW THE AFORESAID VIEW. THE TRIBUNAL BENCHS AT BANGALORE HAVE TO FOLLOW THE DECISION OF THE HONBLE KARNATAKA HIGH COURT. AS FAR AS BENCHES OF TRIBUNAL IN OTHER JURISDICTIONS ARE CONCERNED, THERE ARE TWO VIEWS ON THE ISSUE, ONE IN FAVOUR OF THE ASSESSEE RENDERED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA) AND OTHER OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT.KAUSHALYA. IT IS SETTLED LEGAL POSITION THAT WHERE TWO VIEWS ARE AVAILABLE ON AN ISSUE, THE VIEW FAVOURABLE TO THE ASSESSEE HAS TO BE FOLLOWED. WE THEREFORE PREFER TO FOLLOW THE VIEW EXPRESSED BY THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MANJUNATHA COTTON & GINNING (SUPRA). 15. WE HAVE ALREADY OBSERVED THAT THE SHOW CAUSE NOTICE ISSUED IN THE PRESENT CASE U/S 274 OF THE ACT DOES NOT SPECIFY THE CHARGE AGAINST THE ASSESSEE AS TO WHETHER IT IS FOR CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCURATE PARTICULARS OF INCOME. THE SHOW CAUSE NOTICE U/S 274 OF THE ACT DOES NOT STRIKE OUT THE INAPPROPRIATE WORDS. IN THESE CIRCUMSTANCES, WE ARE OF THE VIEW THAT IMPOSITION OF PENALTY CANNOT BE SUSTAINED. THE PLEA OF THE LD. COUNSEL FOR THE M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 6 ASSESSEE WHICH IS BASED ON THE DECISIONS REFERRED TO IN THE EARLIER PART OF THIS ORDER HAS TO BE ACCEPTED. WE THEREFORE HOLD THAT IMPOSITION OF PENALTY IN THE PRESENT CASE CANNOT BE SUSTAINED AND THE SAME IS DIRECTED TO BE CANCELLED. 16. IN THE RESULT THE APPEAL OF THE ASSESSEE IS ALLOWED. 5. CONSIDERING THE DECISION OF THE COORDINATE BENCH OF ITAT, KOLKATA IN THE CASE OF JEETMAL CHORARIA VS. ACIT, CIRCLE-43, KOLKATA (SUPRA), WHEREIN THE PENALTY HAS BEEN QUASHED ON THE SIMILAR IDENTICAL FACTS AS THE ASSESSEE HAS IN THE PRESENT CASE UNDER CONSIDERATION. WE NOTE THAT IN THE ASSESSEE`S CASE UNDER CONSIDERATION, THE SHOW CAUSE NOTICE ISSUED BY THE AO FOR INITIATION OF PENALTY U/S 271(1)(C) OF THE ACT, IS DEFECTIVE AND DOES NOT SPELL OUT THE BASIS FOR INITIATION OF PENALTY. THEREFORE, RESPECTFULLY FOLLOWING THE JUDGMENT OF THE COORDINATE BENCH IN THE CASE OF JEETMAL CHORARIA(SUPRA), WE CONFIRM THE ORDER PASSED BY THE LD CIT(A) AND ACCORDINGLY, WE DELETE THE PENALTY U/S 271(1)(C) OF THE ACT. 6. SINCE, WE HAVE CONFIRMED THE ORDER OF LD CIT(A) IN DELETING THE PENALTY UNDER SECTION 271 (1) (C ) OF THE ACT, AND THE CROSS-OBJECTION (CO) FILED BY THE ASSESSEE IS ONLY IN SUPPORT OF THE ORDER OF THE LD. CIT(A), SINCE WE HAVE CONFIRMED THE ORDER OF LD CIT(A) DELETING THE PENALTY ORDER U/S 271(1)(C) OF THE ACT, THEREFORE, THE CO FILED BY THE ASSESSEE BECOMES INFRACTUOUS. 7. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED AND CROSS OBJECTION FILED BY THE ASSESSEE IS ALSO DISMISSED. ORDER PRONOUNCED IN THE COURT ON 20.04.2018. SD/- SD/- [A. T. VARKEY] [ A. L. SAINI] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 20.04.2018. [RS, SPS] M/S. SURUCHI VIHAR PVT. LTD. I.T.A NO.233/KOL/2017 CO NO.35/KOL/2017 ASSESSMENT YEAR : 2013-14 7 COPY OF THE ORDER FORWARDED TO : TRUE COPY BY ORDER SENIOR PRIVATE SECRETARY, HEAD OF OFFICE/D.D.O, I.T.A.T, KOLKATA BENCHES, KOLKATA . 1. THE ASSESSEE - M/S. SURUCHI VIHAR PVT. LTD., 172, RASH BEHARI AVENUE, KOLKATA 700 029. 2. THE REVENUE - ACIT, CENTRAL CIRCLE-2(3), KOLKATA, ROOM NOP.403, 4 TH FLOOR, AAYAKAR BHAWAN POORVA, 110, SHANTIPALLY, E.M. BYE PASS, KOLKATA 700 107. 3. THE CIT(A), 4. CIT 5. DR, ITAT, KOLKATA 6. GUARD FILE.