M/s. Doon Valley Roller Flour Mills Ltd., Muzaffarnagar V. ACIT, Muzaffarnagar

ITA 1047/DEL/2015

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 8604 (ITAT-DELHI)
• Duration Of Justice: 4 year(s) 10 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2010-2011
• Appeal Filed On: 25-02-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JAGDISH SINGH
• Keywords: Sale consideration of property below Jantri Value; Principle of natural justice; Question of law; Initiation of penalty proceedings; Difference of opinion; Capital Gains
• Section: 271(1)(c); 50C; 274; 73

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B: NEW DELHI BEFORE SHRI PRASHANT MAHARISHI, ACCOUNTANT MEMBER AND SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER I.T.A. NO. 1047/DEL/2015 ASSESSMENT YEAR: 2010-11 DOON VALLEY ROLLER FLOUR MILLS LTD., VS. ACIT, CIRC LE-1, 190-A, SOUTH CIVIL LINES, MUZAFFARNAGAR. MUZAFFARNAGAR. PAN: AAACD 7419B (APPELLANT) (RESPONDENT) ASSESSEE BY: NONE DEPARTMENT BY: SHRI JAGDISH SINGH, SR. DR DATE OF HEARING: 14/01/2020 DATE OF PRONOUNCEMENT: 20/01/2020 ORDER PER K. NARASIMHA CHARY, JM CHALLENGING THE ORDER DATED 03/12/2014 IN APPEAL NO . 183/13- 14/MZR PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS)- MUZAFFARNAGAR (LD. CIT(A)), FOR ASSESSMENT YEAR 2 010-11, DOON VALLEY ROLLER FLOUR MILLS LTD. (THE ASSESSEE), PREFERRED THIS APPEAL. 2. BRIEF FACTS OF THE CASE ARE THAT, FOR THE ASSESS MENT YEAR 2010-11, THE ASSESSEE FILED THE RETURN OF INCOME ON 13/10/20 10 DECLARING INCOME OF RS.1,33,13,580/-. DURING THE COURSE OF ASSESSMEN T PROCEEDINGS, LEARNED ASSESSING OFFICER NOTICED THAT THE ASSESSEE HAD SOLD THE FACTORY AND AGRICULTURAL LAND AND FOR THE PURPOSE OF CALCUL ATION OF CAPITAL GAIN THE 2 SALE CONSIDERATION OF LAND, BUILDING, PLANT AND MAC HINERY WAS TAKEN BY THE ASSESSEE AT RS.1.2 CRORES BY ASSUMING THE SALE AS SLUMP SALE, WHEREAS THE VALUE FOR THE PURPOSE OF STAMP DUTY UND ER SECTION 50 C OF THE INCOME TAX ACT, 1961 (FOR SHORT THE ACT) WAS SHOWN AT RS.1,93,16,000/-. WHEN ASKED TO JUSTIFY THE SLUMP S ALE AND EXPLAIN AS TO WHY THE SALE CONSIDERATION FOR THE SALE OF FACTORY SHALL NOT BE TAKEN AT RS.1,93,16,000/-AS PER THE PROVISIONS OF SECTION 50 C OF THE ACT, THE ASSESSEE REPLIED THAT AFTER GOING THROUGH ALL THE L EGAL POSITIONS AND FACTS, THE ASSESSEE REVISED THE COMPUTATION OF INCOME BY I GNORING THE CLAIM OF SLUMP SALE AND SHOWING LONG TERM CAPITAL GAINS ON T HE SALE OF FACTORY LAND AFTER TAKING THE SALE CONSIDERATION AS PER SECTION 50C OF THE ACT AND SHORT-TERM CAPITAL GAIN ON SALE OF FACTORY BUILDING AND MACHINERY UNDER SECTION 50C AND ALSO PAID THE BALANCE AMOUNT OF TAX /INTEREST. 3. ON THIS, THE ASSESSING OFFICER WAS OF THE OPINIO N THAT THE ASSESSEE HAD REVISED THE COMPUTATION OF INCOME AFTER DETECTI NG THE CONCEALMENT BY THE REVENUE AND THEREFORE THE ASSESSEE HAD CONCE ALED THE PARTICULARS OF ITS INCOME AND FURNISHED INACCURATE PARTICULARS THEREOF. LEARNED ASSESSING OFFICER ACCORDINGLY INITIATED PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. IN THE PENALTY PROCEEDINGS, THE ASSESSEE SUBMITTED THAT THEY WERE UNDER THE BONA FIDE BELIEF THAT THE CASE OF THE ASSESSEE WAS COVERED UNDER THE PROVISIONS RELATING TO SLUMP SALE, THE PRESCRIBED AUDITORS REPORT WAS ALSO FURNISHED FOR THE CLAIM O F SLUMP SALE AND, THEREFORE, THE ASSESSEE DID NOT FURNISH ANY INACCUR ATE PARTICULARS OF INCOME.ASSESSEE FURTHER SUBMITTED THAT THEY HAVE WI THDRAWN THE CLAIM OF SLUMP SALE BY REDUCING REVISED COMPUTATION OF IN COME VOLUNTARILY AND 3 WITHOUT DEDUCTION, AND THEREFORE, PROVISIONS UNDER SECTION 271(1)( C ) OF THE ACT ARE NOT APPLICABLE TO THE CASE OF THE ASSES SEE. 4. LEARNED ASSESSING OFFICER, HOWEVER, DID NOT AGRE E WITH THE ASSESSEE AND PROCEEDED TO RETURN A FINDING THAT THE ASSESSEE HAD REVISED COMPUTATION OF INCOME ONLY AFTER DETECTING THE CONC EALMENT BY THE DEPARTMENT AND THEREFORE, THE ASSESSEE IS GUILTY OF CONCEALING THE INCOME AND THEREBY FURNISHING THE INACCURATE PARTIC ULARS THEREOF. HE, THEREFORE, BY ORDER DATED 24/9/2013 LEVIED PENALTY OF RS.9,96,000/-FOR FURNISHING INACCURATE PARTICULARS OF ITS INCOME AND ALSO CONCEALING THE PARTICULARS OF INCOME. 5. AGGRIEVED BY THE LEVY OF PENALTY, ASSESSEE PREFE RRED APPEAL BEFORE THE LD. CIT(A) AND SUBMITTED THAT DURING THE YEAR, THE ASSESSEE SOLD ALL THE FIXED ASSETS IN LUMP SUM SALE FOR RS.1.2 CRORES AND OFFERED THE SAME TO TAX UNDER THE HEAD CAPITAL GAIN UNDER SECTION 50B OF THE ACT AS PER THE CERTIFICATE IN FORM NO. 3CEA ISSUED BY THE AUDI TOR AND ENCLOSED THE SAME TO THE RETURN OF INCOME BUT WHEN THE ASSESSING OFFICER ISSUED SHOW CAUSE NOTICE, TO AVOID THE UNWANTED LITIGATION WITH THE DEPARTMENT, ASSESSEE GAVE UP ITS CLAIM OF SLUMP SALE AND FILED THE REVISED COMPUTATION OF INCOME AS PER THE PROVISIONS OF SECT ION 50C OF THE ACT, WHICH WAS CONSIDERED BY THE LEARNED ASSESSING OFFIC ER TO COMPLETE THE ASSESSMENT. ASSESSEE PLACED RELIANCE ON THE DECISIO N OF THE HONBLE APEX COURT IN THE CASE OF CIT VS. RELIANCE PETRO PRODUCT S PRIVATE LIMITED (2010) 322 ITR 158 AND ALSO IN THE CASE OF PRICE WATERHOUS E COOPERS PRIVATE LIMITEDVS. CIT 348 ITR 306 IN SUPPORT OF ITS CONTEN TION THAT MERELY BECAUSE THE ASSESSEE HAD CLAIMED SLUMP SALE BASING ON THE AUDITORS CERTIFICATE IN FORM 3CEA, WHICH THEY GAVE UP IN ORD ER TO PURCHASE 4 PEACEAND TO AVOID UNWANTED LITIGATION,THE ASSESSEE CANNOT BE CHARGED WITH FURNISHING OF INACCURATE PARTICULARS OF INCOME . LD. CIT(A), HOWEVER, DID NOT CONCEDE THE PLEA TAKEN BY THE ASSESSEE AND HOLDING THAT THE ADDITION WAS MADE IN THIS CASE ON LONG TERM CAPITAL GAIN (LTCG) AFTER DETECTION BY THE DEPARTMENT AND THE ASSESSEE FAILED TO FURNISH TRUE PARTICULARS, UPHELD THE LEVY OF PENALTY AND DISMISS ED THE APPEAL. 6. ASSESSEE IS, THEREFORE, BEFORE US IN THIS APPEAL CONTENDING IN THE GROUNDS OF APPEAL THATTHE AUTHORITIES ARE NOT CLEAR WHILE RECORDING PENALTY BEING IMPOSED ON CONCEALMENT OF INCOME OR F URNISHING OF INACCURATE PARTICULARS OF INCOME AND THEREFORE THE LEVY OF PENALTY IS ILLEGAL; THAT THE ADDITIONS/DISALLOWANCES ONLY BECA USE OF TECHNICAL REASON AND DIFFERENCE OF OPINION, WHICH CANNOT BE TREATED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS IN T ERMS OF SECTION 271(1)(C) OF THE ACT AND, AS A MATTER OF FACT, THER E IS NEITHER CONCEALMENT OF PARTICULARS OF INCOME NOR FURNISHING OF INACCURA TE PARTICULARS THEREOF. IT IS FURTHER STATED IN THE GROUNDS OF APPEAL THAT THE ADDITION MADE ON ACCOUNT OF DIFFERENCE BETWEEN THE SLUMP SALE CLAIME D AND THAT OF THE LEARNED ASSESSING OFFICER AS PER SECTION 50C OF THE ACT CANNOT BE TREATED AS CONCEALMENT OF INCOME OR FURNISHING OF INACCURAT E PARTICULARS INASMUCH AS THE ASSESSEE CLAIMED SLUMP SALE UNDER S ECTION 50B OF THE ACT ON THE BASIS OF TECHNICAL OPINION OF COUNSEL WH EREAS THE ASSESSING OFFICER HAS COMPUTED THE SALE OF THE BASIS OF SECTI ON 50 C OF THE ACT AND IT IS ONLY TO AVOID UNWANTED LITIGATION AND TO BY MENT AL PEACE, THE ASSESSEE HAD ACCEPTED THE VIEW OF THE ASSESSING OFFICER BUT THE FACT REMAINS THAT THERE WAS SLUMP SALE AT RS.1.2 CRORES. 5 7. WHEN THE MATTER IS CALLED, HOWEVER, NEITHER THE ASSESSEE NOR ANY AUTHORISED REPRESENTATIVE ENTERED APPEARANCE. IT CO ULD BE SEEN FROM THE RECORD THAT THE NOTICE SENT TO THE ADDRESS GIVEN IN FORM NO. 36 IS RETURNED WITH THE ENDORSEMENT OF THE POSTAL SERVANT THAT THERE IS NO SUCH ADDRESSEE IN THE GIVEN ADDRESS. IF THE ASSESSE E IS AVAILABLE IN SUCH ADDRESS, SUCH NOTICE SHOULD HAVE BEEN SERVED ON THE ASSESSEE. IF FOR ANY REASON, THE ASSESSEE IS NOT AVAILABLE THERE, IT IS FOR THE ASSESSEE TO MAKE ARRANGEMENTS FOR SERVICE OF SUCH NOTICE BY FURNISHI NG THE ADDRESS WHERE THE ASSESSEE WOULD BE AVAILABLE, OR TO DELIVER IT T O SOME AUTHORISED PERSON, OR BY MAKING REQUEST TO THE POSTAL DEPARTME NT TO DETAIN THE MAIL TILL THE ASSESSEE CLAIMS THE SAME. SINCE THE ASSESS EE DOES NOT SEEM TO HAVE ADOPTED ANY OF THESE METHODS, WE ARE THE CONSI DERED OPINION THAT NO TIME COULD BE GRANTED. BASING ON THE RECORD WE S HALL PROCEED TO HEAR THE COUNSEL FOR REVENUE AND DECIDE THE MATTER ON ME RITS. 8. LD. DR PLACED RELIANCE ON THE ORDERS OF THE AUTH ORITIES BELOW AND SUBMITTED THAT THE ASSESSEE REVISED THE RETURN OF I NCOME ONLY AFTER THE DEPARTMENT DETECTED THE CONCEALMENT OF INCOME AND T HEREFORE THE AUTHORITIES ARE JUSTIFIED IN LEVYING THE PENALTY. A CCORDING TO HIM THE CONCEALMENT OF INCOME AMOUNTS TO THE FURNISHING OF INACCURATE PARTICULARS ALSO. 9. WE HAVE GONE THROUGH THE RECORD IN THE LIGHT OF THE SUBMISSIONS MADE BY THE LD. DR. IT COULD BE SEEN FROM THE RECOR D THAT FROM THE BEGINNING THE ASSESSEE MAINTAINED THAT THEY SOLD AL L THEIR FIXED ASSETS INCLUDING LAND, BUILDING, PLANT AND MACHINERY ETC A T RS. 1.2 CRORES AND BASING ON THE CERTIFICATE IN FORM NO.3CEA ISSUED BY THE AUDITOR, THEY WERE LABOURING UNDER THE BONA FIDE BELIEF THAT THE CASE IS COVERED UNDER 6 THE PROVISIONS RELATING TO SLUMP SALE, BUT THE MOME NT THE LEARNED ASSESSING OFFICER QUESTIONED THE SAME, IN ORDER TO PURCHASE PEACE AND TO AVOID LITIGATION, THEY REVISED THE RETURN OF INCOME GIVING UP THE CLAIM OF SLUMP SALE AND OFFERING TO TAX THE AMOUNT COVERED B Y THE VALUE OF THE STAMP DUTY UNDER SECTION 50C OF THE ACT. 10. PENALTY ORDER DOES NOT REVEAL THAT THE LEARNED ASSESSING OFFICER UNDERTAKE ANY NEW MATERIAL THAT WAS SUPPRESSED BY T HE ASSESSEE, PURSUANT TO WHICH THE DETECTION OF CONCEALMENT OF I NCOME WAS FOUND. ITS NOT THE CASE OF THE REVENUE THAT THE ASSESSEE DID NOT REVEAL THE AUDITORS REPORT OR THEIR CLAIM OF SLUMP SALE UNDER SECTION 50B OF THE ACT. FURTHER IT COULD BE SEEN THAT EXCEPT THE VALUATION COVERED BY THE STAMP DUTY, THERE IS NOTHING ON RECORD TO SHOW THAT THE V ALUE OF THE SLUMP SALE WAS NOT RS.1.2 CRORES. EVEN ACCORDING TO THE PENALT Y ORDER, IMMEDIATELY ON THE LEARNED ASSESSING OFFICER ISSUING SHOW CAUSE NOTICE, THE ASSESSEE GAVE UP THE CLAIM OF SLUMP SALE AND BY WAY OF REVIS ED COMPUTATION OF INCOME ACCEPTED THE OPINION OF THE LEARNED ASSESSIN G OFFICER AND PAID THE TAXES THEREON WITH INTEREST. 11. NOW THE QUESTION IS WHETHER THIS AMOUNTS TO EIT HER CONCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS T HEREOF.IN THIS CONTEXT WE WOULD LIKE TO REFER TO THE DECISION OF THE JURIS DICTIONAL HIGH COURT RENDERED INTHE CASE OF CIT VS. DCM LIMITED(2013) 35 9 ITR 0101 (DELHI), WHEREIN THE HONBLE HIGH COURT OF DELHI HELD THAT L AW DOES NOT BAR OR PROHIBIT AN ASSESSEE FOR MAKING A CLAIM, WHICH HE B ELIEVES MAY BE ACCEPTED OR IS PLAUSIBLE; THAT WHEN SUCH A CLAIM IS MADE DURING THE COURSE OF REGULAR OR SCRUTINY ASSESSMENT, LIBERAL V IEW IS REQUIRED TO BE TAKEN AS NECESSARILY THE CLAIM IS BOUND TO BE CAREF ULLY SCRUTINIZED BOTH ON 7 FACTS AND IN LAW; THAT FULL PROBE AND APPRAISAL IS NATURAL AND NORMAL; THAT THREAT OF PENALTY CANNOT BECOME A GAG AND/OR HAUNT AN ASSESSEE FOR MAKING A CLAIM WHICH MAY BE ERRONEOUS OR WRONG, WHE N IT IS MADE DURING THE COURSE OF THE ASSESSMENT PROCEEDINGS; TH AT NORMALLY, PENALTY PROCEEDINGS IN SUCH CASES SHOULD NOT BE INITIATED U NLESS THERE ARE VALID OR GOOD GROUNDS TO SHOW THAT FACTUAL CONCEALMENT HAS B EEN MADE OR INACCURATE PARTICULARS ON FACTS WERE PROVIDED IN TH E COMPUTATION. LAW DOES NOT BAR OR PROHIBIT A PERSON FROM MAKING A CLA IM, WHEN HE KNOWS THE MATTER IS GOING TO BE EXAMINED BY THE ASSESSING OFFICER. 12. IN CIT VS RELIANCE PETROPRODUCTS PVT LTD [2010] 322 ITR 158 HONBLE APEX COURTHELD THAT WHEN THE ASSESSEE PREFERRED A C LAIM, IT WAS UP TO THE AUTHORITIES TO ACCEPT ITS CLAIM IN THE RETURN O R NOT, BUT MERELY BECAUSE THE ASSESSEE HAD CLAIMED THE EXPENDITURE, W HICH CLAIM WAS NOT ACCEPTED OR WAS NOT ACCEPTABLE TO THE REVENUE, THAT BY ITSELF WOULD NOT ATTRACT THE PENALTY UNDER SECTION 271(1 )(C). IT WA S FURTHER HELD THAT IF THE CONTENTION OF THE REVENUE IS ACCEPTED, THEN IN CASE OF EVERY RETURN WHERE THE CLAIM MADE IS NOT ACCEPTED BY ASSESSING O FFICER FOR ANY REASON, THE ASSESSEE WILL INVITE PENALTY UNDER SECT ION 271(1)(C) AND THAT IS CLEARLY NOT THE INTENDMENT OF THE LEGISLATURE. 13. FURTHER, IN THE GROUNDS OF APPEAL THE ASSESSEE QUESTIONED AS TO UNDER WHICH LIMB OF SECTION 271(1)( C ) OF THE ACT THE PENALTY WAS LEVIED, WHETHER IT WAS FOR CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS THEREOF. ON THIS ASPECT, IN THE CASE OF CIT VS MANJUNATHA COTTON & GINNING FACTORY, 359 ITR 565 (KAR) , VIDE PARAGRAPH 60, THE HONBLE KARNATAKA HIGH COURT HAS HELD AS FOLLOWS :- 8 60. CLAUSE (C) DEALS WITH TWO SPECIFIC OFFENCES, TH AT IS TO SAY, CONCEALING PARTICULARS OF INCOME OR FURNISHING INACCUR ATE PARTICULARS OF INCOME. NO DOUBT, THE FACTS OF SOME CASE S MAY ATTRACT BOTH THE OFFENCES AND IN SOME CASES THERE MAY BE OVERLAPPING OF THE TWO OFFENCES BUT IN SUCH CASES TH E INITIATION OF THE PENALTY PROCEEDINGS ALSO MUST BE FOR BOTH THE OFF ENCES. BUT DRAWING UP PENALTY PROCEEDINGS FOR ONE OFFENCE AND FI NDING THE ASSESSEE GUILTY OF ANOTHER OFFENCE OR FINDING HIM GUI LTY FOR EITHER THE ONE OR THE OTHER CANNOT BE SUSTAINED IN LAW. IT IS NEEDLESS TO POINT OUT SATISFACTION OF THE EXISTENCE OF THE GROUND S MENTIONED IN SECTION 271(1)(C) WHEN IT IS A SINE QUA NON FOR IN ITIATION OR PROCEEDINGS, THE PENALTY PROCEEDINGS SHOULD BE CONFINE D ONLY TO THOSE GROUNDS AND THE SAID GROUNDS HAVE TO BE SPECIF ICALLY STATED SO THAT THE ASSESSEE WOULD HAVE THE OPPORTUNITY TO MEE T THOSE GROUNDS. AFTER, HE PLACES HIS VERSION AND TRIES TO SU BSTANTIATE HIS CLAIM, IF AT ALL, PENALTY IS TO BE IMPOSED, IT SHOULD BE IMPOSED ONLY ON THE GROUNDS ON WHICH HE IS CALLED UPON TO ANSWER. I T IS NOT OPEN TO THE AUTHORITY, AT THE TIME OF IMPOSING PENALTY TO IMPOSE PENALTY ON THE GROUNDS OTHER THAN WHAT ASSESSEE WAS CALLED UPON TO MEET. OTHERWISE THOUGH THE INITIATION OF PENALTY PR OCEEDINGS MAY BE VALID AND LEGAL, THE FINAL ORDER IMPOSING PENA LTY WOULD OFFEND PRINCIPLES OF NATURAL JUSTICE AND CANNOT BE SUSTAINED. THUS ONCE THE PROCEEDINGS ARE INITIATED ON ONE GROUND, THE PENALTY SHOULD ALSO BE IMPOSED ON THE SAME GROUND. WHERE THE B ASIS OF THE INITIATION OF PENALTY PROCEEDINGS IS NOT IDENTICA L WITH THE GROUND ON WHICH THE PENALTY WAS IMPOSED, THE IMPOSITI ON OF PENALTY IS NOT VALID. THE VALIDITY OF THE ORDER OF PENALTY MUST BE DETERMINED WITH REFERENCE TO THE INFORMATION, FACTS AND MATERIALS IN THE HANDS OF THE AUTHORITY IMPOSING THE PENALTY A T THE TIME THE ORDER WAS PASSED AND FURTHER DISCOVERY OF FACTS SUBSE QUENT TO THE IMPOSITION OF PENALTY CANNOT VALIDATE THE ORDER OF PENA LTY WHICH, WHEN PASSED, WAS NOT SUSTAINABLE. 14. IN COMMISSIONER OF INCOME TAX V. SSAS EMERALD MEADOWS (2016) 73 TAXMAN.COM 241 (KAR) THE HONBLE KARNATAKA HIGH COURT CONSIDERED THE QUESTION OF LAW AS TO,- 9 WHETHER, OMISSION IF ASSESSING OFFICER TO EXPLICITLY MENTION THAT PENALTY PROCEEDINGS ARE BEING INITIATED FOR FURNISHIN G OF INACCURATE PARTICULARS OR THAT FOR CONCEALMENT OF INCOME MAKES T HE PENALTY ORDER LIABLE FOR CANCELLATION EVEN WHEN IT HAS BEEN PR OVED BEYOND REASONABLE DOUBT THAT THE ASSESSEE HAD CONCEALED INCOM E IN THE FACTS AND CIRCUMSTANCES OF THE CASE? AND THE HONBE HIGH COURT ANSWERED THE SAME IN FAVO UR OF THE ASSESSEE OBSERVING THAT: THE TRIBUNAL HAS ALLOWED THE APPEAL FILED BY THE ASS ESSEE HOLDING THE NOTICE ISSUED BY THE ASSESSING OFFICER UNDER SEC TION 274 READ WITH SECTION 271(1)(C) OF THE INCOME TAX ACT, 1961 ( FOR SHORT THE ACT) TO BE BAD IN LAW AS IT DID NOT SPECIFY WHICH L IMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY PROCEEDINGS HAD B EEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOM E OR FURNISHING OF INACCURATE PARTICULARS OF INCOME. THE TRIBUNAL, W HILE ALLOWING THE APPEAL OF THE ASSESSEE, HAS RELIED ON THE DECISI ON OF THE DIVISION BENCH OF THIS COURT RENDERED IN THE CASE OF COMMISSIONER OF INCOME TAX -VS- MANJUNATHA COTTON AND GINNING FAC TORY (2013) 359 ITR 565. IN OUR VIEW, SINCE THE MATTER IS COVERED BY JUDGMENT OF THE DIVISION BENCH OF THIS COURT, WE ARE OF THE O PINION, NO SUBSTANTIAL QUESTION OF LAW ARISES IN THIS APPEAL FO R DETERMINATION BY THIS COURT. THE APPEAL IS ACCORDINGLY DISMISSED. THE SPECIAL LEAVE PETITION FILED BY THE REVENUE CHA LLENGING THE AFORESAID JUDGEMENT OF THE HIGH COURT WAS DISMISSED BY THE HO NBLE SUPREME COURT HOLDING : WE DO NOT FIND ANY MERIT IN THIS PETITION. THE SPECIAL LEAVE PETITION IS, ACCORDINGLY, DISMISSED. 15. IN PCIT VS. SAHARA INDIA LIFE INSURANCE COMPANY LIMITED CASE, ITA NO 475/2019 AND BATCH, ORDER DATED 02/08/2019, HON BLE DELHI HIGH COURT, UPHELD THE VIEW TAKEN BY THE TRIBUNAL BASING ON THE DECISION OF THE HONBLE KARNATAKA HIGH COURT IN THE CASE OF MAN JUNATHA COTTON AND 10 GINNING FACTORY (SUPRA) AND SSAS EMERALD MEADOWS ( SUPRA) WHEREIN IT WAS HELD THAT THE NOTICE ISSUED BY THE LEARNED ASSE SSING OFFICER WOULD BE BAD IN LAW IF IT DID NOT SPECIFY UNDER WHICH LIMB O F SECTION 271(1)( C ) OF THE ACT, THE PENALTY PROCEEDINGS HAD BEEN INITIATED I.E., WHETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISH ING OF INACCURATE PARTICULARS THEREOF. RELEVANT OBSERVATIONS OF THE HONBLE HIGH COURT READ THAT,- 21. THE RESPONDENT HAD CHALLENGING THE UPHOLDING OF THE PENALTY IMPOSED UNDER SECTION 271(1)(C) OF THE ACT, WHICH WAS ACCEPTED BY THE ITAT. IT FOLLOWED THE DECISION OF KA RNATAKA HIGH COURT IN CIT V. MANJUNATHA COTTON & GINNING FACTORY 3 59 ITR 565 (KAR) AND OBSERVED THAT THE NOTICE ISSUED BY THE AO WOULD BE BAD IN LAW IF IT DID NOT SPECIFY WHICH LIMB OF SECTION 2 71(1)(C) THE PENALTY PROCEEDINGS HAD BEEN INITIATED UNDER I.E. W HETHER FOR CONCEALMENT OF PARTICULARS OF INCOME OR FOR FURNISHIN G OF INACCURATE PARTICULARS OF INCOME. THE KARNATAKA HIG H COURT HAD FOLLOWED THE ABOVE JUDGEMENT IN THE SUBSEQUENT ORDER I N COMMISSIONER OF INCOME TAX V. SSAS EMERALD MEADOWS (2 016) 73 TAXMAN.COM 241 (KAR), THE APPEAL AGAINST WHICH WAS D ISMISSED BY THE SUPREME COURT OF INDIA IN SLP NO. 11485 OF 2016 B Y ORDER DATED 5 TH AUGUST, 2016. 22. ON THIS ISSUE AGAIN THIS COURT IS UNABLE TO FIND ANY ERROR HAVING BEEN COMMITTED BY THE ITAT. 16. THE PENALTY ORDER DOES NOT CLEARLY SPECIFY UNDE R WHICH LIMB OF SECTION 271(1)(C) OF THE ACT, THE PENALTY WAS LEVIE D. SO ALSO, THE IMPUGNED ORDER BY THE LD. CIT(A) ALSO NOT CLEAR ON THAT ASPECT. FOR THESE REASONS, VIEWING FROM ANY ANGLE, WE ARE OF THE CONS IDERED OPINION THAT PENALTY CANNOT BE SUSTAINED AND THE SAME IS LIABLE TO BE DELETED. WE ACCORDINGLY DIRECT FOR ITS DELETION. 11 17. IN THE RESULT APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 20 TH JANUARY, 2020. SD/- SD/- (PRASHANT MAHARISHI) (K.NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 20/01/2020 . AKS